Real Property Transactions. Procedures, Transaction Costs and Models

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Editorial Committee Prof. Benito Arruñada (Pompeu Fabra University, Department of Economics and Management, Barcelona, Spain) Prof. Werner Kuhn (Institute for Geoinformatics, University of Münster, Germany) Prof. Hans Sevatdal (Department of Landscape Planning, Agricultural University of Norway, Ås)

COST is supported by the EU RTD Framework programme

ESF provides the COST Office through an EC contract

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IOS Press BV Nieuwe Hemweg 6b 1013 BG Amsterdam The Netherlands Fax +31-20-6870019 e-mail: [email protected] OTB Research Institute for Housing, Urban and Mobility Studies Delft University of Technology Jaffalaan 9 2628 BX Delft The Netherlands Phone +31 15 2783005 Fax +31 15 2784422 E-mail [email protected] http://www.otb.tudelft.nl Real property transactions. Procedures, transaction costs and models This publication is supported by COST

Design: Cyril Strijdonk Ontwerpburo, Gaanderen Printed in the Netherlands by: Haveka, Alblasserdam

ISBN 978-1-58603-581-5 NUGI 755 Subject headings: real property, modelling, pre-emption rights, COST Legal Notice The publisher is not responsible for the use which might be made of the following information. Neither the COST Office nor any person acting on its behalf is responsible for the use which might be made of the information contained in its publication. The COST Office is not responsible for the external websites referred to in this publication. © Copyright 2007 by COST Office No permission to reproduce or utilise the contents of this book by any means is necessary, other than in the case of images, diagrams or other material from the copyright holders. In such cases, permission of the copyright holders is required. The book may be cited as: ‘COST Action G9 Real property transactions. Procedures, transaction costs and models’.





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COST – the acronym for European COoperation in the field of Scientific and Technical Research – is the oldest and widest European intergovernmental network for cooperation in research. Established by the Ministerial Conference in November 1971, COST is presently used by the scientific communities of 35 European countries to cooperate in common research projects supported by national funds. The funds provided by COST – less than 1% of the total value of the projects – support the COST cooperation networks (COST Actions) through which, with % 30 million per year, more than 30.000 European scientists are involved in research having a total value which exceeds % 2 billion per year. This is the financial worth of the European added value which COST achieves. A ‘bottom up approach’ (the initiative of launching a COST Action comes from the European scientists themselves), ‘à la carte participation’ (only countries interested in the Action participate), ‘equality of access’ (participation is open also to the scientific communities of countries not belonging to the European Union) and ‘flexible structure’ (easy implementation and light management of the research initiatives) are themain characteristics of COST. As precursor of advanced multidisciplinary research COST has a very important role for the realisation of the European Research Area (ERA) anticipating and complementing the activities of the Framework. Programmes, constituting a ‘bridge’ towards the scientific communities of emerging countries, increasing the mobility of researchers across Europe and fostering the establishment of “Networks of Excellence” in many key scientific domains such as: Biomedicine and Molecular Biosciences; Food and Agriculture; Forests, their Products and Services; Materials, Physical and Nanosciences; Chemistry and Molecular Sciences and Technologies; Earth System Science and Environmental Management; Information and Communication Technologies; Transport and Urban Development; Individuals, Societies, Cultures and Health. It covers basic and more applied research and also addresses issues of pre-normative nature or of societal importance. Web: www.cost.esf.org

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$POUFOUT Preface

Part 1 - Overview of action and contents 1

Modelling real property transactions – An overview. . . . . . . 3 Erik Stubkjær, Andrew Frank & Jaap Zevenbergen

1.1 1.2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The objectives of the COST Action G9 ‘Modelling Real Property Transactions’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Modelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Was the analysis of real property transactions revealed?. . . 10 Transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Performance of the COST G9 Action . . . . . . . . . . . . . . . . . . . . 16 Conclusion and further work . . . . . . . . . . . . . . . . . . . . . . . . . . 18 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10

Part 2 - Procedures 2

Modelling property transactions. . . . . . . . . . . . . . . . . . . . . . . 27 Miran Ferlan, Radoš Šumrada & Hans Mattsson

2.1

Introduction: Real property transfers and property formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Systematic approach in general . . . . . . . . . . . . . . . . . . . . . . . . 28 System concepts used and relations between them . . . . . . . 28 Limitations and working method. . . . . . . . . . . . . . . . . . . . . . . 29 Basic components of purchase . . . . . . . . . . . . . . . . . . . . . . . . . 30 Basic functions for property formation . . . . . . . . . . . . . . . . . . 31 Conceivable but excluded components. . . . . . . . . . . . . . . . . . 32 Slovenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Background information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Rights and encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Purchase procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Purchase and subdivision combined . . . . . . . . . . . . . . . . . . . . 41 Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

2.2 2.2.1 2.2.2 2.3 2.4 2.5 2.6 2.6.1 2.6.2 2.6.3 2.6.4 2.6.5 2.6.6 2.7

2.7.1 2.7.2 2.7.3 2.7.4 2.7.5 2.7.6 2.8 2.8.1 2.8.2 2.8.3 2.8.4 2.9

Background information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Rights and encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Purchase procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Purchase and subdivision combined . . . . . . . . . . . . . . . . . . . . 49 Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Simple purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Ordinary purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Purchase and subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

3

Towards more efficient transaction procedures in Latvia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Armands Auzins

3.1 3.2 3.2.1 3.2.2 3.3 3.3.1 3.3.2 3.3.3 3.4 3.5 3.6

Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Real property units and transactions . . . . . . . . . . . . . . . . . . . 82 Real property transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Object of a transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Outcomes of transaction modelling. . . . . . . . . . . . . . . . . . . . . 86 Pure sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Pure subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Subdivision combined with sale . . . . . . . . . . . . . . . . . . . . . . . 92 Costs and duration of transactions . . . . . . . . . . . . . . . . . . . . . 93 Institutional issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Part 3 – Transaction costs 4

4.1 4.2 4.2.1

Transaction costs concerning real property – The case of Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Arvo Vitikainen Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transaction cost theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General transaction cost theory . . . . . . . . . . . . . . . . . . . . . . .

101 101 102 102

4.2.2 4.3 4.4 4.5 4.6

5

5.1 5.2 5.3 5.3.1 5.3.2 5.4 5.4.1 5.4.2 5.4.3 5.4.4 5.5 5.6

Special characteristics of real property transaction . . . . . . 104 Details of property transaction in Finland . . . . . . . . . . . . . . 107 Real property transaction costs in Finland . . . . . . . . . . . . . . 111 The Finnish real property transaction process in an international comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Towards national real estate accounts – The case of Denmark and other European jurisdictions . . . . . . . . . . . . 119 Erik Stubkjær, Ivo Lavrac & Christian Gysting Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The real estate segment – the core and issues of boundary determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present ways of addressing transaction costs of real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The cost of ownership transfer in national accounts and in capital stock statistics for buildings . . . . . . . . . . . . . A reading of supply and use tables: the case of Slovenia . . The SNA classifications applied to the Danish real estate market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main activities related to the performing agents . . . . . . . . . The activities of the segment in terms of the NACE standard classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Estimate of the costs of real estate transactions in Denmark and Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119 119 121 122 122 124 126 126 128 130 134 134 136 137

Part 4 – Modelling approaches 6

6.1 6.2

A socio-technical analysis of cadastral systems . . . . . . . . 143 Maarten Ottens & Erik Stubkjær Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Terminology and theory behind socio-technical systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

6.3 6.4 6.5 6.5.1 6.5.2 6.5.3 6.5.4 6.5.5 6.6 6.7

7

7.1 7.2 7.3 7.4 7.5

8

8.1 8.2 8.3 8.3.1 8.3.2 8.3.3 8.3.4 8.4 8.5 8.5.1 8.5.2 8.6

Socio-technical systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Concluding the exposé of the socio-technical framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The socio-technical cadastral system . . . . . . . . . . . . . . . . . . Actors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Social elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Technical elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

146 150 152 152 154 155 156 157 158 162 163

Real property transactions An approach towards standardisation of legal issues . . . . . . . . . . . . . . . . . . . . . . 167 Jesper Paasch Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The legal domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Classification of real property rights and restrictions. . . . . Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

167 167 169 171 172 178 179

Ontology engineering for comparing property transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 Claudia Hess & Marina Vaskovich Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Initial comparison of property transactions . . . . . . . . . . . . A formal, ontology-based comparison . . . . . . . . . . . . . . . . . Overview of the approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . Developing the domain ontology . . . . . . . . . . . . . . . . . . . . . . The ontology models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ontological reasoning to compute correspondences . . . . . Comparing purchase in Denmark and England/Wales . . . . Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evaluation of the results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evaluation of the approach . . . . . . . . . . . . . . . . . . . . . . . . . . . Future work and conclusions . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183 183 184 186 186 187 189 189 190 196 196 197 198 200

9

9.1 9.2 9.2.1 9.2.2 9.2.3 9.3 9.3.1 9.3.2 9.3.3 9.3.4 9.3.5 9.3.6 9.4 9.5

10

10.1 10.2 10.3 10.4 10.4.1 10.4.2 10.4.3 10.5 10.6

Ontology-based development of reference processes . . . . 203 Claudia Hess & Christoph Schlieder Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reference Models for Processes . . . . . . . . . . . . . . . . . . . . . . . A software engineering reference process: the rational unified process . . . . . . . . . . . . . . . . . . . . . . . . . . Business processes in the R/3 reference model . . . . . . . . . . Reference models in the cadastral domain. . . . . . . . . . . . . . Designing reference processes with an ontology-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inductive development of reference processes . . . . . . . . . . Selection of similar process models . . . . . . . . . . . . . . . . . . . Preparing the ontology models. . . . . . . . . . . . . . . . . . . . . . . . Computing correspondences by ontological reasoning. . . . Suggesting candidates for reference concepts . . . . . . . . . . . Evaluating the candidates. . . . . . . . . . . . . . . . . . . . . . . . . . . . Examples from purchase processes . . . . . . . . . . . . . . . . . . . . Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203 203 204 205 206 207 209 209 211 212 212 213 215 215 217 218

Hierarchies in subdivision processes. . . . . . . . . . . . . . . . . . 221 Gerhard Navratil & Andrew Frank Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hierarchies and their application. . . . . . . . . . . . . . . . . . . . . . Subdivision process in an ontological framework . . . . . . . . The hierarchies for the subdivision process . . . . . . . . . . . . . Creating the physical objects . . . . . . . . . . . . . . . . . . . . . . . . . Creating the social objects . . . . . . . . . . . . . . . . . . . . . . . . . . . Fulfilling the intentions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Formalisation of a real world and a socially constructed object . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >>

221 221 222 224 228 228 229 230 231 234 235

Part 5 – Expanding the scope 11

11.1 11.2 11.3 11.4 11.5 11.6

12

12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9

The real property and general boundary system of England and Wales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 Robert Dixon-Gough & Glyn Hunt Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The evolution of boundaries, property and land ownership in England and Wales . . . . . . . . . . . . . . . . . . . . . . The medieval landscape of boundaries. . . . . . . . . . . . . . . . . Formal enclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The role of the Ordnance Survey . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241 241 242 245 247 251 253 254

Pre-emption rights compared – The Netherlands, Slovenia and Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 Jaap Zevenbergen, Miran Ferlan & Hans Mattsson Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sources of pre-emption rights . . . . . . . . . . . . . . . . . . . . . . . . Beneficiaries of pre-emption rights . . . . . . . . . . . . . . . . . . . . Ways of effectuating the pre-emption right . . . . . . . . . . . . Pre-emption rights in the Netherlands . . . . . . . . . . . . . . . . Pre-emption rights in Slovenia . . . . . . . . . . . . . . . . . . . . . . . Pre-emption rights in Sweden . . . . . . . . . . . . . . . . . . . . . . . . Comparative analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261 262 262 263 264 267 271 275 277 278

Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279





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The importance of real estate to the modern economy cannot easily be overrated. Sales of land and buildings, the mortgage sector and the building industry are all part of this. To make these work properly, transactions in real property are needed, and should be safe and efficient. Nevertheless, the actors and procedures involved appear to differ even between countries with comparable economies. A group of academics from fields like cadastral surveying, information science, economics and law who shared an interest in such procedures came together to study these in more detail. A research design was prepared during 1999 and 2000. Funding for joint activities and travel was sought and found via COST (European Cooperation in the field of Scientific and Technical Research), through Cost as Action G9 ‘Modelling Real Property Transactions’. The research was carried out from the Summer of 2001 till the end of 2005. For the objectives and an overview of the action please see Chapter 1. Although several results were published during this time, this book can be seen as the main reflection of the knowledge gained during the action. Thanks go to all that contributed to the action, both to the authors of this book, as to the others who contributed to the knowledge that we generated together during the action. Further thanks go to the COST organisation for supporting the action, especially to the Scientific Officers Mrs. Anna Danti, Mr. Günter Siegel and Mr. David Gronbaek, as well as to the reviewers Prof. Danica Fink-Hafner, Prof. Hans Sevatdal and the Domain Committee for Individuals, Societies, Cultures and Health (ISCH) for their positive words on the work accomplished. Thanks go to Dirk Dubbeling and his team of OTB Research Institute for Housing, Urban and Mobility Studies of the Delft University of Technology for changing our manuscripts into the book that you are holding right now. Further thanks go to IOS Press for publishing the book. Final thanks go once more to ESF-COST for their financial contribution to this book. The book can only show you so much of what we have experienced and felt throughout the action. This certainly includes the amazement when hearing about other country’s solutions, the challenges in finding commonalities and the satisfaction of discovering patterns and underlying causality. It also includes the camaraderie that comes with a common field of interest and shared experiences. Research is never finished, and we know that this work only covers some steps of a long staircase. But we hope and expect that we and you can build upon it in the future. Jaap Zevenbergen Andrew Frank Erik Stubkjær

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The focus of the research reported in this book is the transfer of ownership and other rights in land and buildings, both of which are of vital importance to society. Ownership rights determine how land is used and by whom it is used, whilst other important property rights are attached to land. Institutional ‘real property rights’ regulate the function of land in society within the limits of the constitution and statutory laws of each country. Real property markets are influenced by the cost of real property transactions. Real property transactions transfer real property rights between people, and rules controlling real property transactions determine when and who may transfer which property rights to whom. Because land and buildings are so important, society has constructed safeguards to regulate real property transactions, which require that specific procedures be followed. The presented research project aimed first to provide a comprehensive and comparable description of real property transactions across European countries and, secondly, to assess and compare the costs related to these transactions. Different legal traditions in different European countries created terminological and semantic difficulties to achieve comparable descriptions. Moreover, land and real property transactions are the object of different scientific disciplines, each overseeing a particular – and often incompatible – aspect: spatial planning, surveying, architecture and economics. The project used a systematic and semi-formal approach to modelling real property transactions, with methods developed by computer scientists, and produced comparable step-by-step descriptions for real property transactions for several European countries. Transaction costs are the sum of the costs of each procedural step plus fees. Fees are simple to determine and the seller and buyer must pay them to a state agency or consultant he or she hires. However, the steps and organisations involved vary substantially, and restricting one’s viewpoint to the parties interested in the transaction does not give the full picture, since notable costs are borne by the public. The comparison of the cost between countries demonstrated significant differences and revealed alternative ‘philosophies’ for controlling land. The COST Action G9 ‘Modelling Real Property Transactions’ was launched in 2001 and brought together researchers mostly from the fields of surveying and economics and from twelve European countries. Through a series of meetings and publications, questions were clarified and answers given, leading to further questions. This book presents the findings after four years and is a compilation of contributions from many of the participants, addressing specific questions and presenting the results.

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The remainder of this chapter introduces the objectives, then reviews the outcome of the action in three sections, which cover clarification of terminology, real property transaction procedures and the cost of these procedures. In a brief section the participants are listed and details of how the work was carried out are given. The chapter closes with a discussion of open questions for future work. At the beginning of a research project the researcher often has a certain question, a certain disciplinary focus and a certain methodology in mind. When conducting research in an interdisciplinary field like ‘cadastral studies’ the researcher must be open to reviewing the question and the methodology when some initial answers have been found. The start document for the Cost Action G9 contained a rather detailed description of legal and administrative aspects, as well as of the ontologies for geographic information processing: these were aspects that had been made clear in prior research. In the course of the project we found it necessary to shift our focus to include the framework of New Institutional Economics to model transaction costs in real property, and we had to investigate the position of the real estate sector within National Statistics, two points only very briefly mentioned in the project document. The project revealed more substantial differences in the objectives that different European countries pursue through the regulation of real property transactions. It becomes evident that a straightforward comparison of the cost of comparable steps in property transactions in different countries is tantamount to comparing apples with oranges and reveals only half the truth. We hope that this research has contributed to an improved understanding of this area and will inspire others to pursue some of the interesting questions we had to leave unanswered.






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In 2001 the objectives (as stated in the Technical Annex, which defines the Cost Action G9) were as follows: „ The main objective of the COST action is to improve the transparency of real property markets and to provide a stronger basis for the reduction of costs of real property transactions by preparing a set of models of real property transactions, which is correct, formalised, and complete according to stated criteria, and then assessing the economic efficiency of these transactions. „ The detailed information will be presented in such way as to include a formal description of the underlying data. For selected European countries a comparative analysis of the economic efficiency of transactions involved in the transfer of property rights will be presented, supplemented by an exploratory analysis of relations between transaction costs and national

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practices regarding land management, education, and governance. „ The models of real property transactions must satisfy the criteria of validity from an information modelling, ontological perspective, as well as from a legal perspective. The transactions regard inter-organisational business workflows, which are stating or changing property rights and parcel lots. „ The essential effects, intended and non-intended, of the real property transactions are likely to differ among the countries being investigated. The comparative analysis of the economic efficiency of transactions will include an identification of these effects and an assessment of their impact on the economic efficiency, including an assessment of the value of transaction information for further purposes. „ Statements will be made on the real property transactions, which affect land management, specifically regarding the transition of land use from rural to urban. The statements will identify threats to the transparency that is at sta[k]e during the transition process. „ The main benefit of the action is that governments, professions, and holders of property rights get a better basis for reducing the costs of the transactions of the markets of real estates. „ The developed models can be used for drafting new ordinances, and for education. The outcome of the comparative analysis can be used for improving the efficiency of the procedures. The provided description of various effects of property transactions can serve as inspiration for other countries, also by addressing the issue of transparency of real property transactions.






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Clarification of terminology and strict definitions are crucial for all scientific research (Gottman et al., 2002). In a project investigating real estate, the primary terminology is the terminology of the national law in the national language (or languages). The meaning of terms like ‘real estate’, ‘ownership’ and ‘mortgage’ is defined in the law (Navratil, 2002; Navratil et al., 2003), with semantics that are different in different national legal contexts. This makes comparison across countries difficult, because the same term may be used differently and often there is no exact correspondence between concepts. For example, a registry of deeds in the United States and a Grundbuch in Germany serve the same overall function, namely listing the owners of land, but the details are different such that a translation of Grundbuch as ‘registry of deeds’ is acceptable only in the most superficial of discussions. National laws select appropriate words from their language to describe legal concepts; these terms have no equivalent even between countries that use the same language. For example, the term Kataster is used in Austria to indicate what in Germany is known as the Liegenschaftsbuch.

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Fortunately, a conceptual agreement in European law does exist; it is based on common roots, namely Roman law as collected in Justinian’s Digest. The cadastral law and its practical execution throughout the Habsburg Empire gives a common background to many Central and Eastern European Countries. Many national real property laws (France, Spain and South America, for example) originated with the codification of civil law in the time of Napoleon and have since evolved. Later on, the Prussian development of civil and administrative law spread its influence beyond the German borders. Other countries, in particular the Nordic countries, Russia and Muslim countries, have separate traditions. This makes it increasingly difficult to find corresponding concepts and to fix translations to a single common terminology necessary in a project like this. The project used English as a working language and used in preference the legal terminology as defined in a well-known law dictionary (Black, 1996), despite the potential dangers of importing part of the conceptual background of a foreign legal system along with the terminology. As far as practical, terms used in a national law were always added to the translated terms, to remind readers of possibly different connotations and to preserve the detailed meaning for more knowledgeable readers.






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The definition of ‘real property’ in the law dictionary is as follows: Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land; real property can be either corporeal (soil and buildings) or incorporeal (easements). – Also termed realty; real estate. (entry Property, subentry Real Property (Black, 1996)). This definition of a legal term points both to physical objects and to nonphysical objects, which exist only in a legal sense: „The first part of the definition is a definition of physical land and buildings: the term ‘real estate’ is prototypically used to describe land parcels, buildings with the land they are sitting on, and also flats in apartment buildings when they are separately owned, etc. It is noteworthy that land parcels must be delimited with recognisable boundaries to form an object in the sense of the law. A land parcel is a physical object in the tiered ontology ((Frank, 2000), see Chapter 10), which ‘counts as real property in the context of the law’ (Searle, 1995). „After the semicolon, the definition expands the applicability of the term ‘real property’ to other – non-physical – objects related to land, primarily rights, such as easements, securities for debt, etc.

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force may be accounted for in categories as graduated and technical staff. As for stocks of fixed assets, the number of units of real estate, buildings, etc., first comes to mind, but office and measurement equipment used by the various agents may be worth considering as well. In responding to the quoted demands, Table 5.2 is modified to accommodate the NACE rev. 1.1 standard classification of activities (Eurostat, 2004),

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which has been implemented as the Danish Industrial Classification (DIC) of activities. Data for the resulting Table 5.3 are omitted here, as quantification details may be found in Stubkjær (2005). Data on production activities are available from Statistics Denmark’s product statistics of business services (Danmarks Statistik, 2005: 68). However, the degree of specification calls for wide-ranging estimates. For civil engineers, lawyers and letting of holiday homes, gross figures are given. Engineering consultancy in terms of building surveys of existing buildings within the context of sale is estimated within the amount rendered for ‘services related to maintenance and facility management’. For lawyers, the statistics specify ‘real estate consultancy’. The information used below was taken from a publication specifically addressing the services of lawyers (Danmarks Statistik, 2004). Unfortunately, data on real estate agents and chartered surveyors are not provided in published statistics. An estimate of real estate agent turnover is based on internal material in Statistics Denmark (Gysting, 2005); personal information). Further information on this sector is available from investigations by the Competition Authority (cf. Konkurrencestyrelsen, 2004). As for chartered surveyors, an estimate is based on information provided by a report by the Competition Authority (Konkurrencestyrelsen, 2004) compared with estimates of European scope (CLGE, 1996) and accounts by the profession (Enemark, 2002). The transaction costs relative to mortgaging are difficult to assess. In the System of National Accounts, the transaction cost of a non-financial transaction is treated as an investment, while the transaction costs related to financial transactions are treated as current costs which are very difficult to identify in the national accounts. An investigation into the accounts of the major banks and mortgage credit institutes might provide some cost assessments, but the boundary between mortgages and mortgage renewals related to conveyances and mortgages for financial reasons, etc. must be taken into account. Remarkably, the NACE classification gives very little detail on public activities. This needs to be redressed, as the presently investigated segment of society comprises official activities as much as market activities. Here, figures are provided in order to account for different Danish duties. To increase specification of public activities, codes from the Danish Budget system (http://www. oes-cs.dk/nummerstruktur/index.cgi) are given. Finally, some entries were made for the sake of completeness (91.33.10 and 01.4), without being based on detailed knowledge of the activity. The economic aspects of the governmental units appear from the yearly Budget, but only in gross figures. For the present purpose, newly developed Yearly Reports provide the necessary detail. The number of completed court cases in 2003 amounted to a total of 4,122,105 completed cases (2003), of which 3,533,325 concerned the Land Registry. More specifically, 195,748 deeds of conveyance and 759,445 mortgage

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deeds were processed, as well as a large number (2,458,862) of ‘other’ documents. Lastly, 119,270 documents regarded movables (security in cars). Processing time varied between 1.1 and 11.3 days, with the mean being 5.6 days. Foreclosure action on real estate was requested in 9,123 cases (2003) and actually performed in 1,842 cases (Domstolsstyrelsens Årsrapport, 2004). Comparing the number of deeds of conveyance (195,748) with the number of sales (91,854), a substantial difference appears. It may be that (most?) deeds are recorded twice during the course of the transaction: firstly as an encumbrance to secure the buyer right in the property unit before the agreed sum is transferred to the owner, and next as a title deed. However, this is far from explaining the difference. In economic terms, the activity may be detailed as in Table 5.4. The conversion to IT took place during the 1990s; only the last few years are shown. The courts apparently do not discern between duties collected for fiscal purposes and fees charged as part of a cost recovery scheme. The total costs of the courts amounted to DKK 1,567 million (2003), all court duties to DKK 470 million, and the revenue from the computerised Land Registry to DKK 271 million, making the cost for the state DKK 826 million (Årsrapport, p. 8). From the citizen’s point of view, the ‘revenue’ of the computerised Land Registry is a cost, and again restricting us to the Land Registry affairs, it seems that citizens pay DKK 116.7 million plus the ‘revenue’ of DKK 270.6 million for the Land Registry activities. The computerised Land Registry provides certificates to be used in conveyance and mortgage transactions, etc. Besides the duty mentioned in the table (Retsafgift), the Land Registry also charges another duty, a type of stamp duty Tinglysningsafgift. According to the Budget, this ‘Tinglysningsafgift’ amounted to DKK 6,147 million in 2003 (Budget, 2005; pos 38.16, page 109). The cadastral activity proper (code 3000) amounts to revenue (fees) of DKK 25.5 million and costs of DKK 42.4 million, rendering net costs of DKK 16.9 million. The corresponding figures for the Danish National Mapping and Cadastre totals amount to 95.8, 281.8, and -186.1 respectively, the deficit largely being covered by the appropriation. The degree of cost recovery therefore amounts to about 60% on cadastral activities proper and 34% in general. The figures for cadastral activities proper render the minimum. Administrative costs (overheads, code 9000), which amount to about 6%, should be added, as

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well as a percentage of the costs for general mapping (codes 1000 and 2000). In addition to the fees, the KMS collects a duty for pure fiscal reasons. This duty amounts to DKK 36.0 million. During 2003, 7,800 new property units were established. This figure does not indicate the substantial number of cases in which the attributes of existing property units were changed. In closing, the report notes that the cadastral, topographic and maritime databases are very important assets for the KMS. The report goes on to say that the value of these databases is difficult to assess in a reliable way, and hence their value cannot be quantified. The KMS is contemplating methods to account for the updating costs and provide stock valuation, as part of a general cost accounting system. The implementation of such methods may change the accounting of the databases.





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The effort to assess the costs of transactions in immovable property units must be based on available evidence as well as estimates or, more appropriately, guesswork. The account made here suggests three major kinds of costs: cost of consultancy activities – approx. DKK 6,800 million; cost of government services – approx. DKK 470 million, as well as stamp duty of DKK 6,500 million. In Table 5.5, the amounts are rendered in euros, based on the 2003-2004 exchange rate (0.134 Euro/DKK). Comparable Finnish data have recently become available (Vitikainen, Chapter 4) and are included in the table as well. Total transaction costs of a sale amounts in both countries to 10-12% of average cost of a property unit, and in both countries about half of this amount are taxed for pure fiscal reasons. The costs of services of financial institutions – mortgage credit institutes and banks – have not been assessed due to difficulties mentioned in Section 4.3. Furthermore, it should be noted that the amount of Danish stamp duty mentioned in the table originates both from sales (duty on conveyance and related mortgage deeds) and from mortgage deeds, which an existing owner registers in order to liquidate capital from the estate. Further investigations are needed to allocate the appropriate amount to sales with mortgages and mortgage renewal for financial reasons only respectively.





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JWXb[+$+;ij_cWj[ie\dWj_edWbYeijie\h[Wbfhef[hjojhWdiWYj_edi_d:[dcWhaWdZ Om KMS > Årsrapport ftp://ftp2. kms.dk/download/pdf/aarsrapport-2003.pdf. Lavrac, Ivo, 2005, Towards National Real Estate Accounts – The Case of Slovenia, in: Nordic Journal of Surveying and Real Estate Research, 2 (1). North, C. Douglass, 1990, Institutions, Institutional Change and Economic Performance, New York (CUP), 152 p., reprinted 2002. OECD, 1999, Economic Accounts for Agriculture. OECD, 2000, Measuring the Role of Tourism in OECD Economies: The OECD Manual on Tourism Satellite Accounts, Employment Module. OECD, 2000, A System of Health Accounts, http://www.oecd.org/dataoecd/41/4/1841456.pdf Soto de, Hernando, 2000, The Mystery of Capital - Why capitalism triumphs in the West and fails everywhere else, London (Bantam Press).

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Stubkjær, Erik, 2004, Satellite accounting of housing and real estate affairs – The case of Denmark, Presentation, ESF/Cost G9, 6th workshop, Riga, 14-16 October, http://costg9.plan.aau.dk/riga2004/presentations/ws6Stubkjær_satelliteaccountdk.pdf. Stubkjær, Erik, 2005, Accounting Costs of Transactions in Real Estate – The Case of Denmark, in: Nordic Journal of Surveying and Real Estate Research, 2 (1). Stuckenschmidt, H., E. Stubkjær & C. Schlieder (eds.), 2003, The Ontology and Modelling of Real Estate Transactions, Aldershot (Ashgate Publishing Ltd.). UN, 1993, System of National Accounts, UN/EC/IMF/OECD/WB, New York. UN, 2003, Integrated Environmental and Economic Accounting, UN/EC/IMF/ OECD/WB, New York. Viitanen, K. & T. Kauko, 2003, Purchase of real property in Finland, in: Stuckenschmidt, H, E. Stubkjær & C. Schlieder (eds.), The Ontology and Modelling of Real Estate Transactions, pp. 55-65, Aldershot (Ashgate Publishing Ltd.).

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Physical reality is not restricted by boundaries we draw; it is, however, restricted by boundaries drawn by nature, that is, by the laws of nature. A short article in a Dutch newspaper (2004) links these remarks to cadastral systems: Over 15 years, a small island in the north of the Netherlands ‘walked’ 2 kilometres eastwards. Due to this historical and ongoing natural process, whole villages disappeared in the sea. Now, however, the island moved into another province. For an island to be able to move into another province, we need not only the natural movement of the island, but also the social concepts of provinces and boundaries; in this case, boundaries fixed to a geodetic reference system and described by map coordinates. With this movement, legal questions regarding responsibility arose. A boundary correction would solve these apparent problems, but would lead to financial losses for the province and the municipality losing area. This brief example shows how physical reality and social concepts can affect each other. Real estate boundaries and jurisdictions are socially defined concepts; they might but do not necessarily coincide with the natural movement of the land. The choice to switch to one boundary system or another is

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a social choice and implications are not easily foreseen. The above example shows what influence the choice of a certain method of delineating interests in land can have. There is a strong interplay between social and technical aspects and choices in this example. To measure coordinates we need technology. This technology is then essential for solving disputes over legal boundaries in a rational fashion. This interplay between social and technical aspects is the subject of research into the nature of so-called socio-technical systems1. In the present paper, we will address two research goals. We use the concept of the sociotechnical system, as explained below, to increase understanding of the cadastral system, whilst also gaining more insight into the concept of the sociotechnical system itself by studying the cadastral system.





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The socio-technical system is a social concept itself, which means that we need to clarify the framework we will use as a basis for the socio-technical analysis, as well as other essential terminology used in this paper. The term ‘system’, as a whole of related elements, can be used for almost everything in this world, from a group of atoms to the whole universe. This makes it both a very versatile and a very empty term. To introduce some conceptual clarity, we will distinguish between two kinds of systems: synchronic and diachronic. 1. The synchronic is the system as it exists at a certain moment in time; it is a snapshot of the constituents of the system, its elements and the relations between them. We will refer to this as a static system view. 2. The diachronic are systems where the elements are connected in time. The same physical object can be seen changing over time, where different states resemble elements related in time. These elements can be systems of the first kind by themselves. We call this a dynamic system view. This distinction is conceptual; practically speaking, it will be impossible to exhaustively map a system at one moment in time, taking all elements and relations properly into account. Systems, especially socio-technical systems, are subject to constant change. By a cadastral system we refer to the official mirroring of interests in land by means of an information system. The information system need not be

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represent the national processes correctly. Here, we will present the results of the third iteration. A cadastral ontology was developed on the basis of two preceding processes. Table 8.1 and Table 8.2 show examples of some of the defined functions and results4. To facilitate their reuse, the activities in which they are typically used, as well as descriptions, are provided. The names of the example activities can be understood as a suggestion for the names of the activities for the specific national processes. Table 8.3 and Table 8.4 show the definition of each activity in terms of functions and results. The activities also include the name of the respective country in their name, i.e. DK for Denmark and EW for England/Wales. The ontology models are formulated in the ontology modelling language OWL (Ontology Web Language) (World Wide Web Consortium, 2004). The ontology models were prepared with the help of ontology editor Protégé, including the OWL PlugIn5. For the sake of clarity, the purchase processes have been divided below into three general phases, namely pre-contracting, contracting, and registration (adapted from Chapter 2 of this book and Šumrada, 2005).

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a

addElement

:: AgentType -> DocElement -> a -> a

getElements

:: a -> [(AgentType,DocElement)]

data ExpertType = Lawyer | Notary | Surveyor | REAgent data AgentType = Owner | Neighbour | Municipality | ExpertType data DocElement = Text | Graphics | Signature | Marking

The list of agent types is restricted to Owner, Neighbour, Municipality, and ExpertType in the formalisation. Experts listed in the model are lawyer, notary, surveyor and the real estate agent. Additional experts can be easily added. The code above describes a document as a real world object. It does not yet include the conditions to be valid in a social context. The conditions were discussed in the previous Section. Three conditions must be met: „all necessary elements must exist „the elements must be applied in the correct order „the creator of the document must be entitled to create such a document. The operation isLegalDocument checks the conditions and returns a Boolean

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value expressing whether the document is a legal document or not. The document receives the status of a social object only if it passes all the checks. The sequence of checks does not matter. Some checks, however, are easier to perform. The document is not legally valid if it fails at least one check. Therefore the simple checks may be performed first and the most complex checks at the end. This would eliminate illegal documents as early as possible. The following code shows a formalisation of the checks. class (Documents a) => LegalDocs a where isLegalDoc

:: a -> Bool

isLegalDoc d = correctCreator d && correctContents d && correctContentOrder d correctCreator

:: a -> Bool

correctContents

:: a -> Bool

correctContents d = ((elem Text cont) || (elem Graphics cont) || ((elem Text cont) && (elem Graphics cont))) && (elem Signature cont) && (elem Marking cont) where cont = ((map snd).getElements) d correctContentOrder :: a -> Bool correctContentOrder d = ((remDup.(map snd).getElements) d == [Text,Signature,Marking]) || ((remDup.(map snd).getElements) d == [Graphics,Signature,Marking]) remDup :: Eq a => [a] -> [a] remDup [ ] = [ ] remDup (x:xs) = x:(rd’ x xs) where rd’ l [ ] = [ ] rd’ l (a:as) = if a == l then rd’ l as else a:(rd’ a as)

Checking the creator of the document varies significantly with the country and the type of document. In Austria, a subdivision including the creation of an easement requires a surveyor and a notary. The licensed surveyor documents the subdivision, while the notary creates the easement. This is not valid, for example, for Sweden, where the surveyor performs both tasks. Thus the implementation must be done in an instance where the model is applied to a specific jurisdiction.

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The contents are similar in all types of legal documents. There must be either text or graphics or a combination of both. This is checked by the expression ((elem Text cont) || (elem Graphics cont) || ((elem Text cont) && (elem Graphics cont)))

in the function correctContents. In the case of textual and graphical representation both parts must be congruent. In addition, the document must contain signatures and the markings of the creator. Checks on the document contents can only check the completeness of necessary data and the logical consistency. It is possible, for example, to check the existence of the necessary data on boundary markers. One test may be to check whether it is specified what kinds of markers have been used. It is not possible, however, to check the correctness of the data without comparing the document with reality. If the document has stones as boundary markers, a formal check cannot decide whether this is true and if the stones are in the correct position. This is the reason why the signatures and markings of the creator are important since he guarantees the factual correctness of the document. Finally, the elements must be added in the correct order. Text and graphics carry the message of the document. Therefore they must be added first. Later the document is signed by all involved parties, expressing their agreement with the contents. The markings must be added as the last step because the creator of the document is responsible for the correct creation process and thus he finishes the process by providing a marking. The order is checked by correctContentOrder. Since each element may occur more than once, e.g. different pieces of text added by different persons, duplicates are removed by applying remDup. Different occurrences will be reduced to a single occurrence and the test will fail if, for example, text has been added after signing the document. The other objects from the real world and the social realm can be modelled in a similar way. It is a two-step process for each object: first, the model defines the real world object with its properties and then the conditions for the social object are applied. This separation shows the difference between physical requirements and social context.





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We have seen that the process of subdivision in the land administration domain consists of several tiers. On the tier of physical objects, pieces of land are subdivided by erecting fences or other barriers. Other physical objects involved are documents, databases and books, and the entries in them. On the tier of socially constructed objects the physical objects must fulfil special re-

Q()+S

quirements and then receive a new status. A piece of land, for example, becomes a parcel when the social process of subdivision is complete. Finally, the result of the process must fit the intentions of the actors. The processes within these tiers are different. Cutting a ` 20 banknote in two pieces creates two different physical objects. The process of subdivision is completely different if we consider that the banknote is a socially constructed object, too. The process of splitting the banknote into smaller pieces works differently. A comparison of the processes throughout Europe shows similarities and differences on the ontological levels. On a physical level the processes are comparable throughout Europe. The process of separating areas in a horseback riding farm is the same in England, Sweden and Slovenia. The differences between subdivision processes occur only on the social level. The construction of society influences the processes by defining the methodology used. The level of cognitive agents combines both aspects. Cognitive agents have the same intentions everywhere in Europe; they want to secure their rights on land. The number and type of agents involved in the process varies since in some countries notaries do not exist or some experts perform tasks that are shared between agents in other countries.





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1811. Kundmachung des allgemeinen bürgerlichen Gesetzbuches (ABGB, Civil Law Code), Justizgesetzsammlung, 946. Al-Taha, K. & R. Barrera, 1994, Identities through Time. International Workshop on Requirements for Integrated Geographic Information Systems, New Orleans, Louisiana. Bird, R., 1998, Introduction to Functional Programming Using Haskell, Hemel Hempstead, UK (Prentice Hall Europe). Bogaerts, T. & J. Zevenbergen, 2001, Cadastral Systems – Alternatives, in: Computers, Environment and Urban Systems 25 (4-5), pp. 325-337. Car, A., 1993, Hierarchical Road Networks: A Framework for Efficient Wayfinding, Poster, European Conference on Spatial Information Theory, COSIT ‘93, Marciana Marina, Island of Elba, Italy, 19-22 September. Car, A., 1997, Hierarchical Spatial Reasoning: Theoretical Consideration and its Application to Modeling Wayfinding, Vienna (Department of Geoinformation).

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Car, A. & A.U. Frank, 1994, General Principles of Hierarchical Spatial Reasoning - The Case of Wayfinding. Spatial Data Handling, Edinburgh, Scotland. Car, A., H. Mehner & G. Taylor, 1999, Experimenting with Hierarchical Wayfinding, 14, Newcastle, (Department of Geomatics, University of Newcastle upon Tyne). Casakin, H., T. Barkowsky, A. Klippel & C. Freksa, 2000, Schematic Maps as Wayfinding Aids, in: Freksa, C., W. Brauer, C. Habel & K. F. Wender, Spatial Cognition II - Integrating Abstract Theories, Empirical Studies, Formal Methods, and Practical Applications, pp. 54-71, Berlin (Springer). Dijkstra, E.W., 1959, A note on two problems in connection with graphs, in: Numerische Mathematik (1), pp. 269-271. Dixon-Gaugh, R., 2004, Land Subdivision. COST G9-Action WG 2-Meeting ‘Cadastral Science’, Szekesfehervar, Hungary. Frank, A.U., 2000, Communication with maps: A formalized model, in: Freksa, C., W. Brauer, C. Habel & K. F. Wender, Spatial Cognition II (International Workshop on Maps and Diagrammatical Representations of the Environment, Hamburg, August 1999), Berlin Heidelberg, (Springer-Verlag), 1849: pp. 80-99. Frank, A.U., 2001, Tiers of ontology and consistency constraints in geographic information systems, in: International Journal of Geographical Information Science 75 (5) (Special Issue on Ontology of Geographic Information), pp. 667-678. Hornsby, K. & M.J. Egenhofer, 1997, Qualitative Representation of Change, in: Hirtle, S. C. & A. U. Frank, Spatial Information Theory - A Theoretical Basis for GIS (International Conference COSIT’97). Berlin-Heidelberg (Springer-Verlag), 1329: pp. 15-33. Hudak, P., J. Peterson & J.H. Fasel, 1997, A Gentle Introduction to Haskell, Yale University. Kuhn, W., 2000, How to produce ontologies: an approach grounded in texts, in: Winter, S., Geographical Domain and Geographical Information Systems (EuroConference on Ontology and Epistemology for Spatial Data Standards, LaLonde-les-Maures, France), Geoinfo Series 19, Vienna (Institute for Geoinformation), pp. 63-71. Kuipers, B., 1996, A Hierarchy of Qualitative Representations of Space, in: Working Papers of the Tenth International Workshop on Qualitative Reasoning (QR-96), Fallen Leaf Lake, California.

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Kuipers, B., 2000, The Spatial Semantic Hierarchy, in: Artificial Intelligence 119, pp. 191-233. Mansbridge, J., 1998, Starting with nothing: on the impossibility of grounding norms solely in self-interest, in: Ben-Ner, A. & L. Putterman, Economics, Values, and Organization, Cambridge, U.K. (Cambridge University Press), pp. 151168. Medak, D., 2001, Lifestyles, in: Frank, A.U., J. Raper & J.-P. Cheylan, Life and Motion of Socio-Economic Units 8, London, (Taylor & Francis), pp. 139-153. Mikkonen, I., 2004, Real Estate Transaction Models – Sale and Subdivision Processes in Finland, COST G9-Action WG 2-Meeting ‘Cadastral Science’, Szekesfehervar, Hungary. North, D.C., 1997, Institutions, Institutional Change and Economic Performance, Cambridge (Cambridge University Press). Peyton Jones, S., J. Hughes & L. Augustsson, 1999, Haskell 98: A Non-strict, Purely Functional Language, from http://www.haskell.org/onlinereport/. Samet, H., 1990, The Design and Analysis of Spatial Data Structures, Reading, Mass. (Addison-Wesley Publishing Company). Searle, J.R., 1995, The Construction of Social Reality, New York (The Free Press). Sismanidis, A., 2004, Modelling the cadastral transactions of sale and subdivision in Greece, COST G9-Action WG 2-Meeting ‘Cadastral Science’, Szekesfehervar, Hungary. Smith, B. & A.C. Varzi, 2000, Fiat and Bone Fide Boundaries, in: Philosophy and Phenomenological Research 60 (2), pp. 401-420. Smith, B., 2003, Ontology, in: Floridi, L., Blackwell Guide to the Philosophy of Computing and Information, Oxford, (Blackwell), pp. 155-166. Stubkjær, E., 2002, Modelling Real Property Transactions, paper presented at the XXII FIG Congress, Washington D.C., USA, April 19-26. Stubkjær, E., 2002, Cadastral Modeling – Grasping the objectives, in: Oosterom, P. van, C. Schlieder, J. Zevenbergen, C. Heß, C. Lemmen & E.M. Fendel (eds.), Standardization in the Cadastral Domain - Proceedings, Frederiksberg, Denmark (The International Federation of Surveyors), pp. 193-206.

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Stubkjær, E., 2003, Modelling Units of Real Property Rights. ScanGIS’2003, in: Virrantaus, K. & H. Tveite, Proceedings of the 9th Scandinavian Research Conference on Geographical Information Science, Espoo, Finland (Department of Surveying, Helsinki University of Technology), pp. 227-238. Thompson, S., 1996, Haskell - The Craft of Functional Programming, Harlow, UK, (Addison-Wesley). Timpf, S., 1997, Cartographic objects in a multi-scale data structure, in: Craglia, M. & H. Couclelis, Geographic Information Research: Bridging the Atlantic, London (Taylor & Francis), pp. 224-234. Timpf, S., 1998, Hierachical Structures in Map Series, Vienna, Austria (Institute for Geoinformation). Timpf, S. & W. Kuhn (2003), Granularity Transformations in Wayfinding. Spatial Cognition 2002, LNAI 2685, Berlin Heidelberg, Germany (Springer-Verlag). Timpf, S., G.S. Volta, D.W. Pollock & M.J. Egenhofer, 1992, A conceptual model of Wayfinding using multiple levels of abstraction. Theories and Methods of Spatio-Temporal Reasoning in Geographic Space, Pisa, Italy (Springer-Verlag). Twaroch, C. & G. Muggenhuber, 1997, Evolution of Land Registration and Cadastre - Case Study: Austria, Joint European Conference on Geographical Information. Vaskovich, M., 2004, Models’ Comparison: Denmark, England and Wales, Belarus, COST G9-Action WG 2-Meeting ‘Cadastral Science’, Szekesfehervar, Hungary. Voicu, H., 2003, Hierarchical Cognitive Maps, in: Neural Networks 16, Special Issue, pp. 569-576. Zevenbergen, J., 2003, Registration of Property Rights; a Systems approach Similar Tasks, but different Roles, in: Notarius International 8 (1-2), pp. 125137. Zevenbergen, J., 2004, Sale and subdivision in the Netherlands, COST G9-Action WG 2-Meeting ‘Cadastral Science’, Szekesfehervar, Hungary.

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Boundaries are fundamental and essential elements of real property, and are embedded in the British landscape largely as a result of the continuity of land ownership. They can vary between 2D or 3D constructs that are either visible or invisible, but remain important bounds in the definition of real property. Furthermore, they are indicators of rights and responsibilities relating to land and property, and as such are essential components in the transaction of real estate properties. Throughout the UK, boundaries are thought of as physical barriers, having evolved from their original roles in restricting livestock movements, to newer responsibilities as urban residential properties’ divisional

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lines. Thus, a once agrarian function has now become a function of land ownership. The physical boundaries in both rural and urban areas of the UK exist as landscape elements in a wide variety of forms or combinations of forms, which might include hedgerows, lines of trees and shrubs, stone walls, earth banks and grass strips (Petit et al., 2003). Such boundaries can be found in many parts of the world, and historically they represent a long-term interaction between agrarian communities, land ownership and their environments (Burel, 1996). However, in most parts of the British Isles such boundaries have been replicated in urban and residential environments, with the result of fundamental confusions concerning both the nature and spatial definition of that boundary. Thus, in both rural and urban areas of the British Isles, boundaries play a significant role in the cultural (Rackam, 1984) and political landscape (Barr & Parr, 1994).





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In the jurisdiction of England and Wales, the word ‘boundary’ has no special meaning in law. It is primarily related to the bounds of land ownership and, as such, it is understood in two ways. The regions’ agency primarily charged with these concerns defines these as follows (LR, 2004): The legal boundary - is a line, which is not visible on the ground, that divides one person’s land from another’s. It is an exact line having no thickness. It is rarely identified with any precision either on the ground or in the deeds. The physical boundary - is a feature such as a fence, wall or a hedge. The legal boundary may be intended to follow the physical boundary but this is not always the case. For example, the legal boundary may run somewhere within a feature or along one particular side of it, or beyond its near or far side, or include any or part of an adjoining roadway or stream. This concept of a boundary generates problems in a (i.e. British) society where power and land ownership is inexorably intertwined. Furthermore, it is the result of a gradual evolution whereby boundaries effectively became the demarcation zone between centres of power rather than land ownership. Since there has never been any fundamental catalyst for change, the system has gradually been allowed to evolve from ‘seats of power’ through to the ownership of individual ‘real estates’ in the form of boundaries between houses or apartments. Taken in their historical context, boundaries throughout England and Wales were either physical enclosures created as a means of preventing the

Q(*)S

movement of either livestock or humans, or demarcations between geographically-related entities (e.g. rivers), which may or may not represent ownership or seats of power. However, changing social values and attitudes throughout the British Isles have gradually led to changes in the perceptions and rules of land ownership, whilst the institutionally-based, regulatory framework defines the nature of the property itself (Dixon-Gough & Deakin, 2003; Dwyer & Hodge, 2001). Cosgrove (1998) takes this concept of changes in social values and attitudes further and examines the wider historical connotations of this evolutionary process. Partly as a result of the Crown’s military interest in naval rather than land power, and as a logical consequence of England’s geographical position, the role of the English aristocracy as a military land-owning class had diminished by the sixteenth century (for the sake of brevity, ‘England’ here includes its neighbouring Welsh principality). Furthermore, wealth during this period increased in importance, crucially not being linked to land ownership but rather to success in trade or commerce. … the English land owning class … was unusually civilian in background, commercial in occupation and commoner in rank (Anderson, 1974: p. 127) Thus, the English relationship between land ownership and commerce was unique in much of continental Europe. This was largely the result of England’s substitution of naval power for land warfare, which effectively eliminated the main role of its feudal aristocracy – that of the provision of land armies. Furthermore, this naval policy meant that the tools or skills of force could alternate between military and commercial use. As a result, land ownership and power evolved into a symbiotic system whereby the enclosed estates of the aristocracy (often on former monastic land) produced wool, which was then purchased by merchants and traded using English ships with continental Europe. In conjunction with colonial possessions, the strength of England’s merchant shipping assured stability to both the landowners and the commercial classes. With time, the commercial classes gained the respectability and trappings of the aristocracy together with the culture of land ownership. Because of these factors (and the wealth generated through colonial expansion and trade), mortgages could be raised on land, providing means for both consolidating land holdings and for agricultural improvements. Also, neither the landowners nor their tenants experienced the tax burden necessary to maintain large armies. These factors led to the concept of a boundary becoming integrated with that of property ownership, with the latter taking priority over the former. This occurred in a society where land ownership represented a far greater level of power than the military establishment, the government, and (to a further extent) the Crown. Although the power of landowners with huge areas of land gradually dimin-

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ished, the decline took place during a period of time in which other significant social and economic changes were also taking place. Placed in this context, the transfer of land from some large landowners to individual family farms had little effect upon boundaries per se. For example, in England and Wales the percentage of agricultural land leased by farmers reduced from 85% in 1885 to 33% in 1997, with boundaries (as parcels of land) remaining intact, whilst permitting the subdivisions of larger estates into smaller, family-owned units. Cannadine (1992) identifies two key elements of this gradual process in England and Wales, which have their origin in political and social changes. Firstly, there is a strong correlation between the Voting Reform Act 1885, which extended passive voting rights to farm workers and tenants, resulting in a significant decline in the number of landowning Members of Parliament. This permitted policy changes in taxation and land rights to be enacted to the benefit of tenants rather than of landowners. One of the effects was the introduction of income tax to landowners, and a shift of tax burdens from the tenants to the landowners. Finally, inheritance taxes were introduced on land holdings in 1895. This redistribution of tax burdens from tenants to landowners reflected the changes in the balance of political power. Furthermore, as the influence of the landowners in Parliament declined, the inheritance taxes increased correspondingly. By 1919, only 10% of parliamentary seats were held by landowners and inheritance taxes had increased to 40%. In 1930, the inheritance tax was increased further to 50%, rising to 60% in 1939. Thus, as the influence of the landowners in Parliament declined, inheritance taxes increased correspondingly. Secondly, there was a gradual change of ownership rights/land policies in favour of tenants and to the expense of landowners. Until 1875, a landlord could evict tenants without compensation, and furthermore could dictate the way in which the land was farmed. The evolution from leased land to privately owned land was slow until 1914. But this slow and gradual transition enabled the former tenant farmers to adjust to the demands of private ownership. It is also important to note that land ownership and power are, in effect, a multi-layered sum of economic variables and cultural values that change with time and place, with either economic or cultural values being dominant at various periods throughout history (Daniels & Cosgrove, 1988). The temporal/spatial changes of economic variables and cultural values, when combined with either economic or cultural values, was defined by Hoskins (1970) as the stable layers of historical accretion. It is summarised by Williams (1973) as follows: … in the final analysis we must relate these histories to the common history of a land and its society.

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This historical evolution of boundaries and land ownership in England and Wales must be examined in the context of evolutionary patterns and these patterns’ modern-day implications, since there is a considerable body of evidence that suggests that many of the present land and property boundaries can be dated to the pre-medieval period.





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Field systems have been imposed upon the British landscape from Neolithic times and their boundaries were physical and took the form of earthworks (embankments and ditches). The characteristic hedgerow evolved in a widespread manner when the enclosure of the open field system commenced during the late sixteenth century. However, it is difficult to date this evolution precisely since the process of enclosure was slow and regional. Furthermore, in some parts of Britain stone walls were used instead of hedgerows, as in northwest England, where field boundaries were established during the seventh to ninth centuries as hamlets and settlements became established in sheltered valleys. Rocks were cleared from the land and used to make small enclosures for the protection of livestock close to farms (Williamson, 2003). By about 1500, many of the monastic livestock farms of the thirteenth and fourteenth centuries had been leased to tenant farmers, and the plots were subdivided into smaller units that corresponded to an increase in the population living in the smaller hamlet communities (Winchester, 2004). In the period between 1540 and 1640 there was a significant change in the nature of hill farming, which included both the beginning of commercialisation and the enclosure of pasture (Winchester, 2000b), leading to a transformation of many upland valleys from hunting forests to pastoral landscapes. It is beyond doubt that boundaries existed during that period. For example, in northwest England, there is documentary evidence of arguments over boundaries that resulted in mediation followed by careful delineation. A reference from 1605 [CRO(K): 1] referred to ‘ould markes and mears’ (old marks and boundaries) and the prohibition against using any ‘outrake’ (rights of passage or communal paths from the enclosed land to the communal land) other than those used ‘time out of mind’ (beyond living memory). This appears to indicate that some form of land division had taken place some considerable time before. Furthermore, tenants were ordered to ‘mylke and foder within theyre own boundes according as they have done heare to fore’ (milk and feed within their own land as they have done before) [CRO(K): 2]. To ensure that tenants kept their animals within the area in which they lived, boundaries were made permanent through the erection of dry stone walls (Parsons, 1993). Parsons (2002) also describes the administration of such areas during the sixteenth century and it is interesting to note that such systems prevailed

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in this region until the mid-eighteenth century. Most communities in the region were anxious to exclude outsiders, even the Lords of the Manor who, technically, owned the land. The particular settlement Troutbeck, described by Parsons (2002) was essentially administered by twelve jurymen who not only reported to the manorial court but also effectively ruled the settlement, despite its theoretical subordination to the manorial court at Windermere. The communal tenure that was unique in this region of England meant that the tenants could sell their tenancy, subdivide it, and bequeath it to their heirs. This system of communal farming gave all tenants a choice to participate in its supervision, to bring about necessary changes, and to elect the twelve jurymen. Disputes were settled by arbitration, with any economic advancement tending to be held in check by partible inheritance, i.e. the division of the holding amongst heirs. An example of the independence of tenants is given by Parsons (2002) who describes a case during the seventeenth century when a family constructed a weir above a mill to increase the flow of water for grinding cereal crops. This impeded the movement of trout and salmon to Windermere (a lake), which resulted in the family being called to the Court of the Exchequer (the manorial lord being King James I). This was successfully contested by the family, with the support of their community, since the king was attempting to alter the favourable nature of their communal tenure. By 1686, market opportunities were making it increasingly difficult to maintain the communal system of farming and tenants began to enclose parcels of land. This was acceptable up to a point although in the late 1600s other tenants instigated a case in Chancery against the family for ‘oppressing’ the communal pasture and contravening custom for their own private gain (Parsons, 2002). Further examples of enclosure are given by Winchester (1987) who cites the case of a commission (1571-1572) that was appointed by the Bishop of Carlisle to enquire into enclosure in the Forest of Westward (an area of common pasture). From the evidence presented it would appear that 127 enclosures, containing an aggregate of 545 acres, had been affected, which presumably meant that 127 new tenants of an average area of 4.5 acres had been created. Houses had been built on 32 of the enclosures and 205 acres allotted to them (each having on average 6 acres). The remaining area of about 430 acres had been allotted to tenants having ancient farmsteads. By the beginning of the seventeenth century it was becoming common practice for tenants to surround their smaller fields with a physical boundary (either a hedge or a stone wall) and thus the landscape was beginning to assume its current appearance (Bouch & Jones, 1961). By 1600, enclosed fields existed in at least 220 townships out of 288 in Cumberland, where they covered about 15% of the total area (Elliott, 1960). Similar examples may be found elsewhere in the Lake Counties and have been described, for example, by Simpson (1929), Porter (1929), and Butler (1929).

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During the pre-industrialisation period, town and country were connected economically, socially and politically (Slater, 2000; Dyer & Giles, 2005). During the medieval period boundaries around towns were tightly constrained since it was important for the Lords of the Manor to be able to distinguish freehold tenants in the town from those holding land by rights of service in the countryside. Bailey (1993) has identified that many of the boundaries revealed in the First Edition, twenty-five miles to the inch plans of 1880 (1:2,500) were derived from unenclosed open field strips and many of the subsequent property boundaries run unbroken from the street front to the rear of the plot (Seddon, 1999). Once urban property development had begun, each owner was responsible for his own subdivision, but most looked to their neighbours to determine a common back boundary and a reasonable breadth for each property. The plots in many medieval towns were very long, regular in width, and appeared very much like agricultural strips (Beresford & St. Joseph, 1979), which might have begun life as fields, land or pasture used by the firstor second-generation town dweller and later transferred into a more urban form. Furthermore, as settlements developed they were rarely the result of ‘planned’ urban development and a pattern of growth that followed in a piecemeal fashion, following field boundaries as small parcels of land were used for building.





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Agrarian improvements in England and Wales were, in effect, a combination of changes in farming practices and fundamental institutional procedures, the most important being the processes of enclosure and the consolidation of holdings leading to increased farm sizes. As discussed above, most of the English landscape had been enclosed by 1700, and even as early as 1500 much of the land was held ‘in severalty’ (i.e. in walled or hedged fields, leased or owned by a single person). Most of the unfenced grazing areas were on agriculturally-marginal land (Williamson, 2002). The process of enclosure (or inclosure, as it was known until the nineteenth century) involved converting such land into private property, which could be achieved in one of the two ways outlined below. Chronologically, the first type was through piecemeal enclosure, which involved a process of land consolidation whereby either through purchase or exchange, groups of adjacent strips of land came under single ownership. The new plots were consequently enclosed by a hedge, fence or wall (Yelling, 1977). Much more involved and complicated was the second process of general enclosure, which required the cooperation of all landowners to reshape and enclose the land, including any open or township fields. Very often, general enclosure followed a period of piecemeal enclosure.

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During the medieval period, the influence of the landowner over his tenants had been weak since it was based upon the feudal system in which rent had replaced services and was administered through the Manorial Courts, which normally found in favour of the tenant rather than the landowner (Winchester, 2003). Furthermore, there was extensive reliance upon communal rights of common land and the open field systems of agriculture. Largely as a result of the way in which the tenanted and communal land was administered through the Manorial Courts, the tenants had virtually total control over their land and the way in which it was farmed and, during this period, referred to by Allen (1991) as the ‘Yeoman Revolution’, the significance of the role of tenants was reflected in the expression ‘Statesman’ used to describe tenant farmers in the remote parts of northwest England (Martins, 2002). The ‘English System’ of land ownership was noted by Arthur Young (cited in Lake, 1989) when, during his travels throughout France at the end of the eighteenth century, he remarked that: Banishment alone will force the French to execute what the English do for pleasure – reside upon and adorn their estates. This comment referred to the strength of the landlord-tenant relationship, which continued until the great land sales following the First World War. This concept is referred to by Martins (2002) as the ‘English Model Farm’ in which the landowner applied technical innovations to the improvement of their estates, the well-being of their tenants, and to the enhancement of the social standing of agricultural interests. These ideals included the maintenance of hedgerow boundaries for the protection of game and to provide ‘challenging jumps’ for both individual horsemen and packs of hounds. Wholesale redesigning of the landscape, based upon the philosophy of ‘beauty and reality’, blurred the line between ‘aesthetic park’ and ‘functional landscape’ (Martins, 2002). The relationship between landowner and tenant was one that evolved in England and Wales both in the way the land was held and in the way in which the rural landscape developed. This led to a more formalised provision of capital in which the landowner provided the fixed capital for the buildings and structure, whilst the tenant provided the capital for the working of the farm and the maintenance of the buildings and infrastructure. Throughout the eighteenth century (the primary period of agricultural improvements), the relationship between landowners and tenants changed from customary tenants to leasehold, in which the majority of farms were held on fixedterm leases that specified the way in which the land was to be farmed. Most common rights were eliminated and many of the communal common lands were enclosed and assigned to private ownership. This change gained impetus during the nineteenth century, as agriculture became more commercial in

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response to the growing urbanisation of England and Wales, and the industrial revolution. It was, in particular, aided by three factors (Martins, 2002): „the decline in customary tenancy in favour of leasehold; „the establishment of private property rights replacing communal systems; „the development of individualistic commercial farming. These factors increased the influence and control of the landowner over his tenants and provided him with a financial incentive for improvement. During the eighteenth century, this was reinforced by the institutional procedures of Parliamentary Enclosure (Turner, 1980, 1984; Mingay, 1997). Following the General Enclosure Act 1836, landowners who owned the majority of land in a township (generally 75%) could apply for a Parliamentary Act through a special process known as a Private Bill. The heyday of Private Bills is reported at around 1840 when about six or seven hundred such acts, many containing several clauses – primarily for massive railway infrastructure developments – were passed through Parliament in a single session [CEM, 1975: 9]). Once the act had been passed, the land was surveyed and allocated according to an Enclosure Award. The process of enclosure, including the establishment of new farms and buildings in the enclosed areas, was expensive but had almost immediate benefits concerning the productivity of the land and inevitably resulted in an increase in land rents. An additional benefit of enclosure was that the landscape could be made more attractive and aesthetically pleasing and whilst increasing the landowner’s power over the farming system, it also increased the tenant’s independence from the constraints of a communal system. The process of enclosure was concentrated in peaks that coincided with external events, such as the wars with France between 1793 and 1815. In northern England, there was an additional peak that occurred in the mid-eighteenth century to cater for the needs of a growing, industrialised area (Collier, 1991). However, Mitchell (1994) considered that the enclosure movement and the accompanying dispossession of the English peasantry were, in effect, an internal colonisation in the home country. As cereal prices declined during the 1870s, landowning ceased to become a wealth-producer, whilst simultaneously, the social and political influence of the landowning families decreased. The introduction of the Agricultural Holdings Act 1885 established a legal basis for tenants’ rights and gradually the domination of the landowner declined in rural areas. The processes of the parliamentary enclosure movement and its relationship between boundaries in the landscape and property ownership are exemplified by the situation in northwest England. The group of landowners taking leading roles in the parliamentary movement that swept this area between 1750 and 1830 were largely the customary tenants (Searle, 1993). By the mideighteenth century, the growth of cattle droving (moving cattle southwards

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to the urban markets) was causing overgrazing of the commons. This placed unsustainable pressures upon the commons and wastes of the region to a point where the system of collective regulation (i.e. the manorial courts) was almost completely undermined. As a result, both small and large landowners accepted that the enclosure of the commons would provide greater control over their ‘shares’. Throughout the region, the once strong cohesion of the manors and groups of customary tenants concluded that it would be in their best interests to become absolute owners of their hitherto communal lands. Upland parliamentary enclosure tended to occur during the nineteenth century – during the latter stages of the movement for two reasons. Firstly, the potential value of the land was low and the problems of enclosing and reclaiming the land were quite high (Chapman, 1987). Secondly, the movement spread from its core in the east Midlands and thus the process reached the upland areas relatively late (Chapman, 2004). Although enclosure of common had taken place since medieval times, the principal difference between the earlier enclosure process and that carried out from the eighteenth century onwards was the scale of the process and the way in which it was carried out. Between the fifteenth and nineteenth centuries, local people and incomers had gradually enclosed small, irregularly sized fields from the commons and wastes, and these are still very much in evidence in many valleys of upland England (Denyer, 1991). They would frequently take the form of oval enclosures on hillsides, or approximately parallel boundaries that opened up as they reached higher ground (Winchester, 2000a; Whyte, 2003). Of some 7.25 million acres (2.94 million ha) in England that were enclosed through Parliamentary Acts, about 2.3 million acres (0.93 million ha) were either common land or waste (Whyte, 2005) and much of this was in the upland areas of northern England. Wild and remote upland areas were surveyed and carefully subdivided into enclosures, with long straight boundaries (often constructed of stone). This was the final stage of the Parliamentary enclosure movement, which commenced in the lower, more fertile regions of England (Buchanan, 1982). More positive reasons for enclosure in the region included: „the improvement of land to increase grain production for an urbanised workforce; „the encroachment by workers in the new, industrialised towns for the construction of cottages (Broadbent, 1997); „the potential of making profits by selling off land for villa development around potential leisure areas (Whyte, 2005). The boundaries of upland enclosures were characterised by wide straight roads and rectilinear enclosures that could run up hillsides, regardless of topography and physical features. Awards could specify the height and width of the boundary, which were carefully demarcated by surveyors and rigorously

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checked once built. A standard parliamentary enclosure wall would require 13 tons of stone for each rood (area of ¼ acre, equivalent to 1011.68 m2). Also associated with the process of parliamentary enclosure was the construction of new farmsteads, particularly when the new consolidated lands lay some distance from the nearest settlement. It was more usual to construct barns or outbuildings for storage or the shelter of livestock within the newly enclosed land, because of the cost of farmsteads’ construction, estimated by White (1997) to be in the order of £1,000 at the beginning of the nineteenth century. Following the enclosure of the commons and wastes of England and Wales, the boundaries and the patterns of land ownership that currently exist largely remained unchanged. This has been a process of gradual evolution, with many of the physical boundaries that exist in the landscape having been in place for over five hundred years. Furthermore, many of the boundaries that exist in rural areas are wide and complicated in nature, often consisting of a combination of a physical barrier together with an adjacent ditch. Whilst these boundaries are perfectly adequate in a rural environment, they have formed the basis of boundaries in more urban areas, in which the concept of a boundary between residential properties, for example, remains identical to that used to prevent livestock from straying between two adjacent fields. Furthermore, it has not been possible for the national mapping agency to differentiate between the two types and function of boundaries in England and Wales.





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During the latter part of the eighteenth century, official mapping had fallen behind that of other European countries and even parts of the Empire such as India. The late introduction of the British Government to official land mapping may essentially be due to the fact that Britain considered itself to be a maritime rather than land-based nation, but also because land mapping needs were largely satisfied by the range and quality of commercially available maps and surveys (Seymour, 1980:1). The formation of the Ordnance Survey began with an 1841 Parliamentary Act to: …authorize and facilitate the Completion of a Survey of Great Britain, Berwick upon Tweed, and the Isle of Man. [VR, 1841: p. 285] This coincided with a period of great improvement in Britain, all of which required accurate maps, including the Enclosure Movement, the construction of roads and canals, and massive urban development brought about by the industrial revolution. The final impetus for the evolution of the Ordnance Survey as a national mapping body came with the military need to counter the

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threat of invasion from France in the late eighteenth century. This, for a large part, dictated the nature and the content of Ordnance Survey maps until the latter part of the twentieth century. Close (1926) considered that at the formation of the Ordnance Survey and in particular when the surveys began to be conducted for the large-scale maps, it was accepted that it was a: …good, practical rule, not, in general, to show invisible boundaries, and it has resulted from this rule that property boundaries, as such, are not shown at all. But since property boundaries depend on fences, walls, hedges and similar visible objects, there is no difficulty in using Ordnance maps as property maps, indeed they are universally used for this purpose; although the hedge or fence may not be a boundary proper, which often, indeed usually, run few feet distant from, and parallel to, it. (Close, 1926: p. 113) The original scale chosen for Ordnance Survey maps was one mile to the inch (1:63,360), which was later supplemented by the six inches to one mile (1:10,560). By the mid-nineteenth century disputes within the Ordnance Survey, supported by engineers and agriculturalists, centred on the requirement for a larger scale map than the 1:10,560 (Seymour, 1980: p. 169). Winterbotham (1934: p. 15) considered that 90% of its advocates based their arguments on its use for land registration, conveyancing, land valuations, and ratings (local land taxes). However, this proposal proved a dichotomy – it had to remain the Ordnance Survey’s base source of topographic mapping whilst adequately providing for cadastral surveying. In short, the proposal failed since it failed to satisfy the rigorous requirements of a cadastre within Britain. The various acts relating to Land Registration within the jurisdictions of the UK are discussed by Dixon-Gough and Deakin (2003). However, one particular act is of relevance to the role of the Ordnance Survey as a potential cadastral mapping organisation. The Land Register Act 1875 made the provision that the Land Registry should be based upon a public map to which private maps could be related. Furthermore, the Ordnance Survey 1:2,500 map, where available, was specified as the public map. In addition, this Act also introduced the concept of the general boundary and removed the insistence that the division between two properties should be precisely defined. In this context, a Select Committee of the House of Commons sat in 1878 and recommended that the ‘completion of the Cadastral Survey of England and Wales’ be completed ‘immediately’ (Seymour, 1980: p. 178). However, one of the problems of utilising the Ordnance Survey large-scale maps as cadastral maps rested on two significant matters of substance. Firstly, there was the ability of the Ordnance Survey with its multiplicity of tasks to produce up-to-date maps when required by the Land Registry. Secondly, there was the inability of the military-trained surveyors to understand the requirements of the Land Registry and, in particular, to interpret deeds on

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the ground. Both matters could have been resolved, but the concept of the integration of a Land Registry Map Department within the Ordnance Survey foundered largely as a result of inter-departmental rivalry but also because adequate funding was never made available by the government (Seymour, 1980: p. 199). This is, at present, how the situation still stands. Despite the fact that all large-scale Ordnance Survey plans are now fully digitised and, thus, all parcels recorded on the plans are recorded in the form of National Grid coordinates, the maps may still only be used to record general boundaries. However, with the Land Registration Act 2002 that came into force in October 2003, it is now possible for owners (with the agreement of their neighbours) to have their mutual boundaries determined to within a few centimetres at the Land Registry (Powell, 2005a). This is referred to as Determined Boundaries and will be recorded as such on the title documents of the properties.





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Within the jurisdictions of the British Isles in general and England and Wales in particular, physical boundaries, largely for agrarian functions, have developed over a continuous period of some 5,000 years. However, since the development of those boundaries was essentially for agrarian purposes, the most important defining element was the ownership of land rather than the precise nature of the boundary. Certainly, for almost the entire period of the existence of boundaries within the British Isles, land ownership was the true measure of power and of wealth. Furthermore, this concept of a boundary as being a physical division between adjacent properties rather than a legally defined boundary persisted through the processes of urbanisation, particularly in the case of the jurisdiction of England and Wales. Over the past 200 years, there have been attempts to formalise the boundaries but these have foundered largely through a lack of will by the government to make a legal definition of a boundary, and through the lack of funds that have prevented the Ordnance Survey and the Land Registry from developing a true cadastral map. Currently, it is estimated that the land in England and Wales is split into about 21 million land parcels. A 2005 estimate of the cost for providing all these with precisely coordinated legal boundaries was £42,000,000 (Powell, 2005b). Although the status quo appears to be deadlock, it is conceivable that this might change sometime in the twentyfirst century, through the current developments of e-conveyancing technology and future European Union legislation.

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Allen, R.C., 1991, The two English agricultural revolutions, 1450-1850, in: Campbell, B.M.S. & M. Overton, (eds.), Land, Labour and Livestock, pp. 236-254, Manchester (Manchester University Press). Anderson, P., 1974, Lineages of the Absolutist State, London (New Left Books). Bailey, M., 1993, Tale of two towns: Buntingford and Standon in the late middle ages, in: Journal of Medieval History, 19, pp. 358-369. Barr, C.J. & T.W. Parr, 1994, Hedgerows: linking ecological research and countryside policy, in: Watt, T.A. & G.P. Buckley (eds.), Hedgerow Management and Conservation, pp. 119-136, London (Wye College Press). Beresford, M.W. & J.K. St. Joseph, 1979, Medieval England. An Aerial Survey (second edition), Cambridge (Cambridge University Press). Bond, D., 1988, Excavations at the North Ring Mucking Essex, in: East Anglian Archaeologist, 43, pp. 21-30. Bouch, C.M.L. & G.P. Jones, 1961, A Short Economic and Social History of the Lake Counties, 1500-1830, Manchester (Manchester University Press). Bradley, R., 2000, Mental and material landscapes in prehistoric Britain, in: Hooke, D. (ed.), Landscape: the Richest Historic Record, pp. 1-12, Supplementary Series 1 (Society for Landscape Studies). Broadbent, J.F., 1997, Dewsbury inclosure pp. 1796-1806, in: Yorkshire Archaeological Journal, 69, pp. 209-226. Brück, J., 1995, A place for the dead: the role of human remains in Late Bronze Age Britain, in: Proceedings of the Prehistoric Society, 61, pp. 245-277. Buchanan J.R., 1982, The financing of parliamentary waste enclosure: some evidence from north Somerset, in: Agriculture History Review, 30, pp. 112-126. Burel, F., 1996, Hedgerows and their role in agricultural landscapes, in: Critical Review in Plant Sciences, 15, pp. 169-190. Butler, W., 1929, Townfields of Broughton and Subberthwaite-in-Furness, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, second series, XXIV, pp. 266-272.

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Cannadine, D., 1992, The Rise and Fall of the British Aristocracy, London (Picador). CEM, approx. 1975, The machinery of Government and the legal system: Paper 2: The machinery of Government – II, study paper, Reading (College of Estate Management). Chapman, J., 1987, The extent and nature of Parliamentary enclosure, in: Agricultural History Review, 35, pp. 25-35. Chapman, J., 2004, Parliamentary enclosure of the uplands, in: Whyte, I.D. & A.J.L. Winchester (eds.), Society, Landscape and Environment in Upland Britain, Society for Landscape Studies, pp. 79-88, Supplementary Series 2. Close, C., 1926, Early Years of the Ordnance Survey (reprinted with a new introduction by J.B. Harley, 1969), Newton Abbot (David and Charles Reprints). Collier, S., 1991, Whitehaven 1660-1800, London (Her Majesty’s Stationary Office). Cosgrove, D.E., 1998, Social Formation and Symbolic Landscape, Madison (University of Wisconsin Press). Cosgrove, D. & S. Daniels (eds.), 1988, Iconography of Landscape, Cambridge Studies in Historical Geography, Cambridge (Cambridge University Press). CRO(K), 1. Troutbeck and Townend, WD/TE 4/XIV126, Kendal (Cumbrian Record Office). CRO(K), 2. Troutbeck and Townend, WD/TE 24, Kendal (Cumbrian Record Office). Daniels, S. & D. Cosgrove, 1988, Introduction: Iconography and landscape, in: Cosgrove, D. & S. Daniels (eds.), Iconography of Landscape, pp. 1-10, Cambridge Studies in Historical Geography, Cambridge (Cambridge University Press). Denyer, S., 1991, Traditional Buildings and Life in the Lake District, London (Gollancz). Dixon-Gough, R.W. & M. Deakin, 2003, Property transactions in the UK: a situation of institutional stability or technical change?, in: Stukenschmidt, H., E. Stubkjær & C. Schlieder (eds.), The Ontology and Modelling of Real Estate Transactions, Aldershot (Ashgate Publishing Ltd.).

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Dyer, C.C. & K. Giles (eds.), 2005, Town and Country in the Middle Ages: Contrasts, Contacts and Interconnections 1100-1500, London (Society of Medieval Research Monograph). Dwyer, J. & I. Hodge, 2001, The challenge of change: demands and expectations for farmed land, in: Smout, T.C. (ed.), Nature, Landscape and People since the Second World War, pp. 117-134, East Lothian (Tuckwell Press). Elliott, G.G., 1960, The enclosures of Aspatria, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, second series, LX, pp. 97-108. Faith, R., 1997, The English Peasantry and the Growth of Lordships, Leicester (Leicester University Press). Fleming, A., 1998. The Dartmoor Reaves, London (Batsford). Fowler, P. & I. Blackwell, 1998, An English Countryside Explored: the Land of Lettice Sweetapple, Stroud (Tempus). Gibson, A., 1998, Stonehenge and Timber Circles, Stroud (Tempus). Green, M., 2000, A Landscape Revealed: 10,000 Years on a Chalkland Farm, Stroud (Tempus Publishing Ltd.). Hooke, D., 1988, Regional variations in southern and central England in the Anglo-Saxon period and its relationship to land units and settlements, in: Hooke, D. (ed.), Anglo-Saxon Settlements, Oxford (Blackwell). Hoskins, W.G., 1970, The Making of the English Landscape, London (Phillimore and Co.). Lake, J., 1989, Historic Farm Buildings, London (Blandford Press). LR, 2004, Land Registry Practise Guide 40, London (Land Registry, HMSO), www.landregistry.gov.uk, accessed 15th December 2005. Martins, S.W., 2002, The English Model Farm: Building the Agricultural Ideal, 1700-1914, Macclesfield (Windgather Press). Mingay, G.E., 1997, Parliamentary Enclosure in England: An Introduction to its Causes, Incidence and Impacts, London (Longman).

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Mitchell, W.J.T., 1994, Imperial landscape, in: Mitchell, W.J.T., (ed.), Landscape and Power, pp. 5-34, Chicago (University of Chicago Press). Oosthuizen, S., 2003, The roots of the common fields: linking pre-historic and medieval field systems in west Cambridgeshire, in: Landscapes, 4 (1), pp. 4064. Parsons, M.A., 1993, Pasture farming in Troutbeck, Westmorland, 1550-1750, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, second series, XCIII, pp. 115-130. Parsons, M.A., 2002, The Brownes of Townend and the townships of Troutbeck, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, third series, II, pp. 171-182. Petit, S., R.C. Stuart, M.K. Gillespie & C.J. Barr, 2003, Field boundaries in Great Britain: stock and change between 1984, 1990 and 1998, in: Journal of Environmental Management, 67, pp. 229-238. Porter, R.E., 1929, The townfields of Coniston, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, second series, XXIV, pp. 266-272. Postan, M., 1956-1957, Glastonbury Estates in the 12th century: a reply, in: Economic History Review, 9, pp. 106-118. Powell, D., 2005a, Know your boundaries, in: RICS Business, 27 September. Powell, D., 2005b, Boundary Dispute Resolution in England & Wales – Surveyors and Lawyers Working Together to Resolve Problems, International Federation of Surveyors, February 2005, pp. 1-6. Rackam, O., 1986, The History of the Countryside, London (Dent). Reed, M., 1990, Landscapes of Britain: From the Beginning to 1914, London (Routledge). Rippon, S., 1991, Early planned landscapes in south west Essex, in: Transactions of the Essex Archaeological and History Society, 22, pp. 46-60. Rippon, S., 1995, Roman settlement and salt production on the Somerset coast: the work of Samuel Nash, in: Transactions of the Somerset Archaeological and Natural History Society, 139, pp. 99-117.

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Rippon, S., 1996, The Gwent Levels: the Evolution of a Wetland Landscape, CBA Research Report 105, York. Rippon, S., 1997, The Severn Estuary: Landscape Evolution and Wetland Reclamation, Leicester (Leicester University Press). Rippon, S., 2000, Landscapes in transition: the later Roman and early medieval period, in: Hooke, D. (ed.) Landscape: the Richest Historic Record, pp. 47-62, Supplementary Series, No. 1 (Society for Landscape Studies). Searle, C.E., 1993, Customary tenants and the enclosure of the Cumbrian Commons, in: Northern History, XXIX, pp. 126-153. Seddon, V., 1999, Buntingford: Extensive Urban Survey Assessment Report, Hertfordshire County Council. Seymour, W.A., 1980, A History of the Ordnance Survey, London (Dawson). Simpson, G.M., 1929, Townfields of Threlkeld, Mardale, Wet Sleddale and Langdale, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, second series, XXIV, pp. 266-272. Slater, T.R., 2000, Understanding the landscape of towns, in: Hooke, D. (ed.) Landscape. The Richest Historical Record, pp. 97-108, Supplementary Series, No.1 (Society for Landscape Studies). Slater, T.R., 2005, Planning medieval ‘street towns’: the Hertfordshire evidence, in: Landscape History, 26, pp. 19-35. Taylor, C.C. & P.J. Fowler, 1978, Roman fields into medieval furlongs?, in: Bowen, H.C. & P.J. Fowler, (eds.), Early Land Allotment in the British Isles, BAR British Series, 43, Oxford. Turner, M.E., 1980, English Parliamentary Enclosure, Folkestone (Dawson). Turner, M.E., 1984, The landscape of Parliamentary Enclosure, in: Reed, M. (ed.), Discovering Past Landscapes, pp. 132-166, London (Croom Helm). Victorae Reginae, 1841, An Act to authorize and facilitate the Completion of a Survey of Great Britain, Berwick upon Tweed, and the Isle of Man, 21st June 1841, chapter 30, printed by George E. Eyre & Andrew Spottiswoode, London, pp. 285-294.

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White, R., 1997, The Yorkshire Dales, London (English Heritage). Whyte, I., 2003, Transforming Fell and Valley: Landscapes and Parliamentary Enclosure in North West England, Centre for North West Regional Studies, Lancaster (Lancaster University). Whyte, I., 2005, Taming the fells: Parliamentary Enclosure in Northern England, in: Landscapes 6 (1), pp. 46-61. Whyte, I.D. & A.J.L. Winchester (eds.), 2004, Society, Landscape and Environment in Upland Britain, Supplementary Series, No. 2 (Society for Landscape Studies). Williams, R., 1973, The Country and the City, London (Hogarth Press). Williamson, T., 1987, Early co-axial field systems on the East Anglian boulder clay, Proceedings of the Prehistoric Society, 53, pp. 419-431. Williamson, T., 1999, Post Medieval field drainage, in: Cook, H. & T. Williamson (eds.), Water management in the English Landscape: Field, Marsh and Meadow, Edinburgh (Edinburgh University Press). Williamson, T., 2000, The Origins of Herefordshire, Manchester (Manchester University Press). Williamson, T., 2002, The Transformation of Rural England: Farming and the Landscape 1700-1870, Exeter (University of Exeter Press). Williamson, T., 2003, Shaping Medieval Landscapes: Settlement, Society, Environment, Macclesfield (Windgather Press). Winchester, A.J.L., 1987, Landscape and Society in Medieval Cumbria, Edinburgh (John Donald Publishers Ltd.). Winchester, A.J.L., 2000a, Hill farming landscapes of medieval Northern England, 75-84, in: Hooke, D. (ed.), Landscape. The Richest Historical Record, pp. 97-108, Supplementary Series, No. 1 (Society for Landscape Studies). Winchester, A.J.L., 2000b, Harvest of the Hills: Rural Life in Northern England and the Scottish Borders 1400-1700, Edinburgh (Edinburgh University Press).

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Winchester, A.J.L., 2003, Demesne livestock farming in the Lake District: the vaccary at Gatesgarth, Buttermere in the late thirteenth century, in: Transactions of the Cumberland and Westmorland Antiquarian and Archaeological Society, third series, III, pp. 109-118. Winchester, A.J.L., 2004, Moorland forests of Medieval England, in: Whyte, I.D. & A.J.L. Winchester, (eds.) Society, Landscape and Environment in Upland Britain, pp. 75-84, Supplementary Series, No. 2 (Society for Landscape Studies). Winterbotham, H.St.J.L., 1934, The National Plans, Ordnance Survey Professional Papers No. 16, London (HMSO). Yates, D., 1999, Bronze Age field systems in the Thames Valley, in: Oxfordshire Journal of Archaeology, 18, pp. 157-170. Yelling, J.A., 1977, Common Field and Enclosure in England 1450-1850, London (MacMillan).

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Property rights in land and buildings, as defined in private law, do not give the right holder the (total) control that is sometimes assumed. In the general interest of society (or at least of the administration) the control of the right holder over his property is limited in many ways. One of the ways in which the control of a right holder can be limited is through a limitation in the right of ‘disposal’ through a pre-emption right. The pre-emption right can be described as the right in which a beneficiary has a right but not an obligation to buy a specific real property at a certain price. Pre-emption right is the privilege to take priority over others in claiming title to a real property that is subjected to pre-emption. The exact extent of the right differs between laws, but some more precise general definitions for pre-emption right are as follows: „ a right of claiming or purchasing before or in preference to others (Webster’s Encyclopedic Unabridged Dictionary of the English Language); „ a privilege to take priority over others in claiming property. It is the right to buy before others (Black’s Law Dictionary); „ a potential buyer’s right to have the first opportunity to buy, at a specified price, if the seller chooses to sell (Black’s Law Dictionary). The pre-emption right is a typical latent right, which lays silently on a property. Only when the present owner (or right holder) decides that he is interested in selling the property does the right wake up. The pre-emption right holder as such has no means of forcing the present owner to take this decision to sell. Of course it could be that in certain cases where the pre-emption right applies, other land development instruments can also be applied, such as compulsory purchase (including expropriation). In this article we will first describe the different types of sources, beneficiaries and ways of effectuating of pre-emption rights in general. Then an overview is given of pre-emption rights in the Netherlands, Slovenia and Sweden. A comparison is made, which emphasises the burdens and benefits of preemption rights as such, and indicates which of the different types described in the general part seem to be the least disruptive to real property transactions. We do not concentrate on the objectives the pre-emption rights are supposed to meet, nor on alternative tools with which these objectives could also be met (like compulsory purchase).




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There are several ways in which a pre-emption right can come to rest on a property. These types are by law, declaration or contract. „ Type 1 - The first two sources of pre-emption rights are based on special legal stipulations, which introduce that under certain circumstances a certain beneficiary is awarded the pre-emption right. These circumstances are defined by present or planned land use type, and related to that, a class of beneficiaries is named. In the case of a pre-emption right by law the preemption right exists ex lege for all properties to which the defined circumstances apply. The appropriate person (either the seller of the property, or the authority that enforces the pre-emption right) has to realise its application based on the presence of these circumstances. „ Type 2 - In the case of pre-emption right by declaration it is the beneficiary who actively has to create his pre-emption right. Even when the criteria for establishing the pre-emption right are met, it does not come into effect automatically in this case. The fact that the criteria are in place only allows the beneficiary to declare that he wants to create the pre-emption right. This could be done by individual letter informing the present owner, or by a wider decision that describes (in a rather detailed way) the area over which the pre-emption right is vested. The procedure could include publicising the declaration in certain newspapers (and/or the official gazette), as well as recording them in the land registry or the cadastre. „ Type 3 - A pre-emption right by contract is not typically a limitation in the general interest, since it is the present owner (or one of his predecessors) who has granted this right by contract to the beneficiary. This could be part of the contract under which he became the owner (perhaps the previous owner wishes to retain some control over the person to whom the property passes on later), or through a special contract to introduce a pre-emption right, usually called ‘an option’. This type of contract is sometimes associated with land speculation.





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The beneficiary of the pre-emption right, he who can purchase before others, can also be of different types. Essentially, any type of natural or juridical person can be a beneficiary, although the category of possible beneficiaries differs between different types of pre-emption rights. For legal pre-emption rights this could be local or national authorities (municipalities = M or the State = S). But it can be a certain class of private person as well (like a (neighbouring or tenant) farmer = F or an apartment user (or an association of apartment users) = A). One would not necessarily expect private persons as

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beneficiary of legal pre-emption rights that are created in the ‘general interest of society’. However societies are often inclined to give such a right to certain types of users of properties. For contractual pre-emption rights any beneficiary would be possible, but in most cases it is a developer (company or investor).





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With regard to the way the beneficiary gets the chance to effectuate his preemption right and actually purchase the property, we can distinguish between two rather different types. „ Type I - Mandatory offering - The present owner, after deciding he wishes to sell his property, must offer it first to the beneficiary. In this way the beneficiary has the ‘right of first refusal’. The beneficiary has to decide whether he wants to purchase the property or forsake his pre-emption right. To make this decision he needs to know the price to pay for the property. In some cases the seller can set the price (but cannot sell it at a lower price to someone else if the beneficiary forsakes his right), and in other cases the price has to be determined by the seller and buyer together. This is not a normal, free market negotiation, and thus special procedures are needed in case buyer and seller do not agree on what the price would be for this property. Often the price should equal the compensation under expropriation, and thus the ultimate remedy might be a court decision. In the event that a property over which a pre-emption right exists is sold to someone other than the beneficiary, a formal check has to be made at the end of the transaction process (just before final registration) to ascertain whether the beneficiary’s rights have been respected during the process. „ Type II - Taking over the agreed contract - The present owner as seller and an interested buyer will start to go through the normal process. The buyer will investigate the property and items related to it, and he and the seller will negotiate a price. When they have finalised their contract, but before the transfer of the property is completed, the beneficiary receives a copy of the contract, and has the right to step in. Normally the land registry will send the contract to the beneficiary after receiving the application for registration. Based on his interest in the property and the contents of the contract, the beneficiary decides whether he wants to take over the contract as it stands, including the agreed price and any special stipulations. The beneficiary then becomes the owner of the property and the buyer is left with nothing. Normally he will be compensated for the necessary costs made on collecting information on the property and use of experts. The time he invested in the process is, however, not compensated.

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Contractual pre-emption right; option Contractual pre-emption rights in the Netherlands as such are treated as normal contracts, for which no specific regulations apply. If someone buys a property without giving the beneficiary the chance to buy it first, the contractual pre-emption right beneficiary is not much protected. The beneficiary can, of course, claim for damages from the seller for breach of contract, but can only sue a buyer who is not in good faith. Since from the point of view of civil law, personal rights (like options) cannot be registered, the stricter interpretation of good faith for registered information does not apply (in 2003 registration of sales agreements with certain legal effects was introduced). In case law there are examples where the beneficiary could prove that the buyer knowingly ignored the beneficiary’s pre-emption right, and where the compensation awarded included the transfer of the property from the buyer to the beneficiary. Municipal pre-emption right One very important pre-emption right in the Netherlands gives municipalities the right to declare their interest in certain areas which are needed for urban expansion or urban renewal. The Municipal Pre-emption Rights Act (WVG) has been a politically contested item since its beginnings in 1981. In particular, around the turn of the millennium several changes were made to expand the categories of urban expansion to which the right can be applied, as well as curtailing ways to elope the pre-emption right (for instance through recorded options). The municipal pre-emption right is created by declaration in the form of a decision of the municipal council, but the proposal of the municipal executive to take such a decision can already bring with it the same legal effect when it is published in the prescribed way. The decision can be made based on several types of spatial plans. For some types the pre-emption right is valid for a maximum period of two years; for other types it remains in force as long as the actual and planned use are different. The decision must contain a detailed description of the property, as well as its cadastral size and the name of the owner, including reference to an attached cadastral map. The decision is published by making the decision and the cadastral map available for public inspection in the municipal offices and by publishing a notice in the Government Newspaper and one or more local newspapers. The pre-emption right is created the day after this notice has appeared in the Government Newspaper (unless the proposal has already been published in the same way). Notice of the decision is sent to all owners mentioned in the decision. Finally, a copy of the decision and the cadastral map is sent to the Netherlands’ Cadastre, Land Registry and Mapping Agency

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(Kadaster) for registration. Since it is possible that the right is already created before its existence can be seen in the cadastre and land registry system, the notarial professional organisation (KNB) keeps a daily updated online list of published announcements. If the owner of a property over which the municipality has the pre-emption right wishes to sell his property he must offer it first to the municipality. The law contains a number of exemptions to this, for instance if the sale is to a close relative or another public authority. A further exemption is made for sales to someone who has a contractual right to acquire the property (completion of a sales agreement or an option). This only holds when the contract was registered before the pre-emption right came into effect (the day after publication of the notice). This rule of public law has made it possible since 1996 to register certain personal rights in the public registers (contrary to the traditional civil law principle that only property rights can be registered, and well before the more general rule for sales agreements that was introduced in 2003). Since 2002 the transfer has to be finalized within six months after the pre-emption right has been created. This avoids long-term uncertainty about the position of the property (especially when the potential buyer is a developer, which influences the possibilities to use other land development tools like expropriation and division of costs for public space). When the owner has offered the property to the municipality, the municipality has eight weeks to decide whether it is interested in buying the property. If the municipality informs the owner that it is not interested, or fails to reply within eight weeks, the owner is free to sell the property within the next three years. If the municipality has informed the owner of its interest, the owner has four weeks to appeal to the provincial executive to be exempted from its obligation to negotiate with the municipality. If no such appeal is made, or the appeal is rejected, negotiations start. The owner can demand that the municipality ask the court to appoint experts to give advice with regard to the price. The experts apply the rules from the expropriation law in determining the price. Based on the advice, the municipality can decide to agree on the proposed price, ask the court to rule on the price, or inform the owner that it is no longer interested in buying the property. If the municipality has agreed on the proposed price, the owner can decide to ask the court to rule on the price, accept the proposed price or decide not to sell his property after all. If the owner goes for the first option, the municipality can inform him that it is no longer interested in buying. If the court gets involved, a judge, the court secretary and experts will investigate the property on site. After a hearing the court will rule on the price, applying the rules of the expropriation law. No appeal is possible. All reasonable costs of the procedure have to be paid by the municipality, unless the court decides differently. The owner can demand within three months of the ruling that the municipality completes the transfer.

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The procedure is quite complicated and when the municipality does not respond within the set time for any of the steps, it loses its pre-emption right, and the owner can freely sell within the next three years. To make sure that the pre-emption right is not bypassed by owners, the notary—who has a mandatory role in the completion of the transfer in the Netherlands— must include a declaration under every transfer deed either that the pre-emption right did not apply to this property, or that the transfer is not contradictory to the provisions of the law (and thus falls under an exception or that the municipality has forfeited its right during the procedure). The registrar must check that such a declaration is included under every transfer deed that is presented for registration, unless a municipality is the acquirer. Little use was made of the right during the first 15 years, but its use has increased with the changes to the cases in which it could be applied. On 1 January 2000 the pre-emption right was registered with 25,000 parcels, which is less than 1% of all parcels. About one third of the municipalities applied it at that time. The pre-emption right was used to some extent for large urban expansion projects (‘Vinex-locatie’). For most projects one or more properties were acquired with it, and in some cases as many as 20. Today numbers are most likely higher due to the changes in the law allowing for a wider application of the pre-emption right. Pre-emption right for certain rural areas A similar pre-emption right for agricultural land that has been assigned as a nature reserve or is part of a land consolidation scheme, with the national land development authority as its beneficiary, is contained in the Law on Agricultural Land Conveyance. However, the law has been only partly enacted, and it is disputed if the pre-emption right could be applied at present. The declaration of the areas to which the pre-emption right applies must be done by the Minister of Agriculture, Nature and Food Quality. Tenant’s pre-emption right Another pre-emption right exists with regard to agricultural land that is used under a tenancy agreement (pacht). This pre-emption right follows directly from the law (ex lege) and has the tenant as the beneficiary in the case that the owner wants to sell the property the tenant is using. This pre-emption right is one of several legal provisions that is meant to secure the position and livelihood of tenant farmers. Although tenancy is in principle a personal right, a change of landlord does not affect the tenancy agreement, and the law also contains several provisions for close relatives of the tenant who wish to continue farming after his death or retirement, replacing him as the tenant. Land under tenancy should be mainly seen as a safe investment. Nevertheless, one could buy the land with the intention to farm it oneself in the future. The law gives rules for such a buyer to end the tenancy contract after a

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number of years. Because this affects the farm of the tenant, he has the right of first refusal when the owner wants to sell the land. Exemptions exist and include sale to a close relative, to an authority or to anybody who plans to use the land for an allowed, non-agricultural purpose. Large financial interests are involved, since the price of land under a tenancy agreement is often 40%–50% lower than for land that is free for use by the buyer, and the tenant can buy the land at this reduced price. Therefore the law provides in a rule to let the original owner share in the difference if the tenant who bought it sells it off soon after he acquired it. The share is 100% in the first year and is reduced by 10% for each year after the original transaction. After the owner has offered the tenant the property, the tenant has one month to respond. If he forfeits his right, the owner can sell the property within one year. If the tenant indicates his interest in becoming owner, negotiations on the price will start. If no agreement is reached, the owner can ask the relevant authority (grondkamer) to value the property. If the owner is willing to sell at the valued price (or lower) he will inform the tenant of this. If the tenant does not let the owner know within a month that he wants to buy at this price, the owner can sell within one year (at this price or a higher one. If the owner sells the property without offering it to the tenant first or sells it at a lower price than it was first offered for to the tenant (who declined that offer), the original owner must pay one year’s contract payment as a fine to the tenant. The tenant can also sue for further compensation. In the second half of the 1990s the national administration as landlord sold large tracts of its land to sitting tenants, totaling 29,000 ha between 1995 and 1999 (mainly to generate money to buy land for nature reserves).





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The pre-emption right in Slovenia can be exercised according to the procedure provided for in the Code of Obligation (Official Gazette of the Republic of Slovenia, 89/1999). Pre-emption rights can be established regarding this act through a contract or by law. Pre-emption rights established through a contract Through the contract between the owner and the third person (beneficiary), the owner of the property undertakes to notify the beneficiary of the intended sale of the property and the conditions of the sale. The beneficiary must, within thirty days of receipt of the owner’s notice of the intended sale, duly notify the seller about his decision of whether he will exercise the pre-emption right or not. He must pay the purchase price established in the owner’s notification about the intended sale when concluding the contract of sale. If the seller refuses to accept the payment, the beneficiary must within the re-

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quired time deposit the funds at the Court of Justice. If a contract of sale does not provide for immediate payment of the purchase price, the beneficiary has the right to demand the same condition, valid with respect to the third person. In this case it is required that the beneficiary provide security. The preemption rights cannot be alienated or inherited, unless otherwise provided for by other acts. At compulsory public auction the beneficiary cannot appeal that he has the pre-emption right but can buy the property based upon the last achieved price. However, the beneficiary whose pre-emptive right is entered into the land register can lodge a request for the annulment of the auction if he has not been specifically invited to the public auction. The pre-emptive right expires as of the date defined in the contract. The maximum defined time is thirty years. If the time of duration is not defined, the pre-emption rights expire within five years of the conclusion of the contract. Some special cases are important for the seller and buyer of the property under the pre-emption right: a. When the seller sells the property but does not notify the beneficiary of the purchase. If the buyer knows about the pre-emption right, the beneficiary can, in six months of the day on which he has found out about the sales agreement, request an annulment of the contract, and the property should be sold to him under the same conditions. b. If the seller incorrectly notifies the beneficiary about the sale conditions of the property, and the beneficiary finds out about the new conditions, then the six-month period to void the contract runs from the day on which the beneficiary finds out the real contractual conditions. The property should be sold under the same conditions to him. Pre-emption rights established by law In the case that the pre-emption right is established by means of a special law, the duration of the pre-emption right is not time-restricted. The following pre-emption rights can be established by law: „pre-emption rights for the municipality (Spatial Planning Act); „pre-emption rights for agricultural land and forest land (Agricultural Land Act, Forest Act); „pre-emption rights for water areas (Water Act); „pre-emption rights for apartments (Law of Property Act); „pre-emption rights for cultural heritage (Cultural Heritage Protection Act); and „pre-emption rights for protected areas (Nature Conservation Act). Pre-emption rights for the municipality In order to facilitate the acquisition by the municipality of land for urban de-

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velopment a number of legal tools were introduced, including two types of pre-emption rights: „ pre-emption rights of municipalities to acquire land for urban development; „ pre-emption rights of municipalities for residential houses intended for rental purposes. Of importance are the pre-emption rights that represent an instrument that allows the municipality to execute spatial policy in the public and private interest. To perform a spatial policy, the municipality must prepare a special decree. The legal bases for such a decree are the adopted municipal spatial planning documents. Within the defined area the municipality can, according to the Spatial Planning Act, establish pre-emption rights on the desired areas which may comprise one or more plots or even the whole territory of the municipality. Areas under the pre-emption rights must be defined with such accuracy that the boundary can be established in the natural environment and later also in the planning documents and land cadastre maps. Pre-emption rights for agricultural and forest land The right of pre-emption may be claimed in the purchase of agricultural or forest land by beneficiaries in the following order: 1. the co-owner; 2. the farmer whose land in his/her ownership is adjacent to the land to be sold; 3. the hirer of the land to be sold; 4. another farmer; 5. agricultural organisation or a self-employed person that requires land or a farm holding to perform their agricultural and/or forestry activities; and 6. the National Farm Land and Forest Fund of the Republic of Slovenia. Information regarding the selling of an agricultural parcel must be announced on the notice board at the Administrative Office of Agriculture for thirty days. Among farmers ranked together under the same conditions, the farmer whose agricultural activity is the sole or main activity shall have the pre-emption right, followed by the farmer who merely cultivates land, and the farmer designated by the seller. The Administrative Office of Agriculture assembles all interested potential buyers with pertaining information and arranges them in pre-emption right order. The first in line may purchase the property or give up this right to the next buyer. If the beneficiary does not exercise his/her right, the notice must stay on the notice board at the administrative office for another thirty days. If nobody is interested in buying the agricultural land, then the land should be sold to other buyers. If none of the beneficiaries exercises the pre-emption right, the seller may sell the agricultural land to any person who accepts the offer in time and is approved by the administrative unit.

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Pre-emption rights for forest land The Republic of Slovenia has pre-emption rights regarding the purchase of protected forest land. Protected forest land is land which protects itself or lower lying agricultural land and forests. If the state is not interested in the purchase of protected forest land, the local municipality on whose territory the forest is situated is the second beneficiary. In special cases the Republic of Slovenia or local municipality must, upon the request of the owner, redeem the forest land. The redemption price is the market price of the forest land. If the parties do not agree on the market price, the court appraiser defines the price. Pre-emption rights for water areas The state is the only beneficiary regarding the purchase of water areas. The landowner must inform the Ministry of Environment and Space of the intended sale and submit all data about the water area (identification, price and terms of payment). If the state refuses to buy the offered land, the next beneficiary is determined according to the Agricultural Land Act. Pre-emption rights for apartments The Property Act and the Housing Act establish the following pre-emption rights: 1. When the house or apartment in co-ownership is sold, the seller (co-owner) is obliged to first offer his share to the other co-owners. 2. When the owners intend to sell a rental property, they are obliged to submit the offer to the tenants, so that they can purchase the property for the price a buyer should pay. They have two months to reach a decision. 3. The owner of an apartment in a small dwelling is obliged to submit the offer to other owners in this dwelling so that they can purchase the property. The law defines a small dwelling as: „a house with no more than 5 apartments; and „at least two or more owners. Pre-emption rights for cultural heritage The state or the local municipality in whose area a cultural heritage site is located has the pre-emptive right to purchase the cultural heritage site. Owners of monuments must notify the beneficiaries of the intended sale and its conditions. When the sale concerns a cultural heritage site of national importance, the state must within sixty days notify the owner about the intended purchase. If the state does not accept the offer, the local community is the next beneficiary and shall in thirty days decide on the intended purchase. If the sale of a cultural heritage site is of local importance, the local community shall, within thirty days, notify the owner as to whether it accepts the sale offer.

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Pre-emption rights for protected areas The state has the pre-emption right if the property is located in protected areas for which it has itself adopted the instrument of protection, notwithstanding the provisions of other acts that regulate the pre-emption right. Local municipalities have the pre-emption right regarding the property located in the protected area for which they have themselves adopted the instrument of protection. The owner of the property shall, by sending an offer to the manager of the protected area (the ministry or local municipality) inform them of the intended sale. If the state or local municipality accepts the offer, it must notify the owner within sixty days of receiving notification. If they do not exercise this pre-emption right, the beneficiary at a later time may still exercise one of the other pre-emption rights for agricultural, forest, water or building land (depending on the nature of the protected area). When no beneficiary exercises the pre-emption right, the seller may sell the property to another buyer who has accepted the offer in time and in the manner laid down by the regulations on agricultural and forest land.





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In Sweden there are three pre-emption situations which are of interest. One of them entitles municipalities to intervene and take over a completed property purchase. This happens when the buyer applies to the land registration authority to have the purchase registered. The second situation entitles a lessee to purchase an agricultural property that is up for sale, and the third entitles rental housing tenants in a multi-family dwelling to purchase their rented house if the property is put on the market. All three instances are subject to a number of conditions, the main points of which will be described here. No contractual pre-emption rights exist It should also be mentioned that the option to purchase a property at some future date has no legal foundation, the reason being that the law will not countenance unknown agreements on conditional land ownership. Neither can the completion of a purchase be made subject to reversion clauses of more than two years’ duration. Here we see the legislator’s concern with making the title to real property unambiguous. Thus a pre-emptive situation cannot arise out of an option agreement. Municipal pre-emption right The municipal right of pre-emption means that the municipality may acquire a property on the conditions agreed in a completed transaction between seller and buyer. This legislation entered into force in 1968. The state wanted an inexpensive instrument for land policy, at a time when housing production

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was growing rapidly. The aim was to make land available in good time and at reasonable prices for urban development. Negotiations for voluntary sale could be time-consuming and still end with the landowner refusing to sell or demanding a very high price. Expropriation too was time-consuming, and also procedurally expensive. Besides, the coercion that it represented was highly repellent, whereas pre-emption was felt to involve a more limited element of compulsion. Pre-emption offered an inexpensive, simple and fast alternative to ordinary purchase and expropriation. Land included in the sale could thus be pre-empted at an early stage, which facilitated ‘land banking’. In particular, agricultural land and forest land could be acquired before anticipated values connected with changing land use had arisen, which helped to curb the rise in property prices. The structure of the legislation, requiring the municipality to be notified by the land registration authority of purchases and purchase prices, kept the municipalities continuously informed of developments in local property markets. The most important precondition for the municipality being allowed to exercise its right of pre-emption was for the real property to be needed for future urban development, but the scope of municipal pre-emption has been gradually widened. Today it also applies to the purchase of real property for refurbishment or for conversion to housing. The same goes for land and facilities for sport and outdoor recreation, and to buildings of historical or environmental interest. At the same time a number of situations have been excluded from preemption, in particular single- and two-family dwellings and weekend cottages with a land area of less than 3,000 m². The only exception is that all developed real property can be pre-empted in areas where there is high demand for secondary homes development to secure permanent habitation of the area. The land sale contracts cannot be pre-empted if the state is buyer or seller. Sales between spouses or to a descendant are also excluded. The pre-emption process operates as follows. When the buyer applies for registration of a completed purchase by the land registration authority, to protect the purchase against third parties and to acquire the possibilities of mortgaging the property, the land registration authority has to decide whether the right of pre-emption is applicable. If it is, the municipality has to be notified of the purchase and then has three months in which to decide whether or not to exercise the right. A municipality which does exercise this right will be regarded as buyer, with effect from the date when the contract of sale was signed with the original buyer. If certain contractual conditions cannot be fulfilled, they may be adjusted if there is no detriment to the seller. The municipality also has to reimburse the buyer for expenses incurred. The original buyer, however, may contest the exercise of the right of preemption, in which case the municipality must refer the matter to the government for examination. The cases will then be adjudicated with reference

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to the conditions defined for exercising the right of pre-emption and also with reference to a further condition, namely whether exercise of the right is oppressive with regard to the relation between buyer and seller or the conditions or circumstances of the sale. This law seems a relic of a time when strong land policy control was needed, and it is no longer really an active tool of urban development; pre-emption nowadays is exercised barely ten times per year in the whole of Sweden. For these few cases a large administrative apparatus is necessary: the land registration authority has to judge whether the right of pre-emption is applicable, the municipal officials have to investigate whether pre-emption is an attractive proposition, and a political assembly has to decide on the exercise or waiver of the right. Some municipalities have therefore informed the land registration authority that they are uninterested in the faculty of pre-emption, either generally or in certain districts. If so, registration of ownership is granted directly, while other purchases are invariably reported to the municipality. The municipality then has to reply in writing, indicating whether or not it is interested, and if it fails to do so the right of pre-emption will lapse after three months. The decision in such matters is often delegated to municipal officials. Agricultural tenants’ pre-emption rights The other two pre-emption laws are based on a different principle, namely the principle that the party with a right of pre-emption must declare in advance their interest in purchasing the property should it be put up for sale. The purpose of that legislation regarding the lessee’s right of purchasing an agricultural property (effective from 1985) is to give agriculturally competent buyers who are interested in living on a farm the right of first refusal when it comes on the market. Another aim is to establish a connection between ownership and use, and for the lessee who has lived on a farm and worked it not to be ejected when it is sold. The basic rule is that the lessee must work the property and also live on it. A lessee interested in purchasing the property should it come up for sale must notify the land registration authority to this effect, so that an entry can be made in the land register. The landowner must be informed of the entry thus made. The entry is valid for ten years and then has to be renewed, or else it will lapse. The leasehold property must then not be disposed of without the lessee first being offered the chance of buying it. There are exceptions to this rule, like family sales. If the municipality is the buyer, this overrides the right of pre-emption – naturally, since municipal purchases, like national government land purchases, often have statutory priority. If the landowner wishes to sell his agricultural property and the lessee has given notice that he is interested in buying it, the landowner must inform the regional tenancies tribunal of the proposed terms of a contract of sale, includ-

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